As companies contemplate this new year, with its attendant new budgeting cycle, they will inevitably revisit their strategic business and IT decisions.

One of these will be whether to retain functions in-house or outsource them. This will be, as it always is, a vital decision and it should never be entered into lightly.

Here are 11 reasons to outsource in 2011,why it’s better to delegate peripheral aspects of your enterprise to the experts and just focus on core business processes and tasks.:

1. Strategic alignment.

2. Cost.

Most of the time, it is more cost-effective for an outsourcer to deliver a service than for this service to be provided in-house. This is partly due to the extent of specialisation of an outsourcer, and the critical mass to be had from managing multiple contracts. Cost should never be the primary reason to outsource, but it is undoubtedly a factor.

3. Skills acquisition and retention.

Employers struggle to acquire, upskill and retain good people on their own. Outsourcers can provide staff with a variety of jobs and positions, and a growth path that encourages both the acquisition of superior skills and their retention.

4. Specialization.

There are some skills that are in extremely short supply and very high demand – consider enterprise performance management, services-oriented architecture or voice biometrics. In all of these cases, it is far better to contract with an external specialist than to try and attract and retain these skills.

5. Guaranteed service delivery.

If a company’s in-house team fails to deliver according to mandate, there’s not much that can be done about it. If the outsourcer misses deadline, functionality or exceeds budget, a company always has the fallback of contractual penalties.

6. Focus on core business.

It is almost certainly not worth an entrepreneur’s or medium enterprise’s time and effort to retain skills for break-and-fix or call center services, but this is the core focus of an outsourcer that has chosen to focus on this area. That leaves management free to get on with its main purpose of existence, which is to focus on shareholder and customer considerations and to make a profit.

7. Enhance return on equity.

8. Lay a foundation for software as a service (SaaS).

9. Easily accommodate new technology waves.

Consider Windows 7, which has been a corporate showstopper, or virtualisation, which many companies wish to embrace, but whose complexity deters adoption. Both are better outsourced.

10. Acquire capability without headcount.

Post-recession, companies are disinclined to hire, but they still need skills. Outsourcing gives management the internal capability on the one hand, without the cost to company on the other.

11. The ability to move expenses off balance sheet.

Taking budgetary items off balance sheet and to opex is a very attractive prospect for management, which also do not have to go into budgeting cycles and reviews to acquire new equipment or software.



FTE Outsourcing – Ideal Outsourcing Model!


Holden, Andrew. “11 Reasons to Outsource this 2011.” 1 December 2010. IT Web. 3 January 2011. Link Here.


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