• Add a Comment
  • Edit
  • More Actions v
  • Quarantine this Entry

Comments (21)

1 Ekow Gyepi-Garbrah commented Permalink

Thank you for the insight. Reading through these white papers is really helpful. Great Job!

2 Denver Peterson commented Permalink

Interesting analysis on the evolution of "Outsourcing." I think Apple is an example of how 'Cost-cutters' move along the spectrum to 'Growth-Seekers' to 'Innovators.'

The article states that the main outcome being sought is 'cost-cutting.' So, everyone outsources to save money, but not everyone cares as much about innovation.
I thought of three companies while reading this. Uber, Apple and TaskRabbit.
Uber has a business model that can't be 'outsourced' overseas, but they are strategically using partners (Car Service operators, certain cities' taxi services) to strategically outsource the product the company provides to the customer. The choices in partners will affect the success of their business.
I think Apple has gone through the spectrum. Their effectiveness as being an 'innovator' on this scale is seen in their balance sheet. But, I wonder if future MBA students will someday examine a case study: Apple and Foxconn: the true cost of Apple's outsourcing model.
TaskRabbit is great for little things (laundry, dry-cleaning, picking things up from the store), but what about professional services? There is an opportunity for strategic outsourcing to a 'Advanced TaskRabbit' network of partners. A company could be created to certify that the 'TaskRabbiters' are up tasks that include: accounting, financial services, graphic design work etc. If TaskRabbit is built on outsourcing the work to others, they can benefit from a partner that can share the risks and rewards.

3 Nick Weaver commented Permalink

Very observant. My company is wrestling with these challenges as well. Look forward to more posts!!

4 Chris Brown commented Permalink

One of the benefits of outsourcing that's rarely spoken about is that outsourcing portions of a process that can be done more quickly and efficiently offshore will provide a cost savings that translates to more use of onshore resources.

Simply put, you can keep more onshore employees by outsourcing small portions of a manufacturing process that don't need highly skilled, well paid employees.
Also, there are cost benefits because some processes are less expensively executed in other countries with more natural resources and access to a larger labor pool.
Denver's example of Apple speaks to this benefit. Spend money on innovation not on basic manufacturing functions.

5 Samuel Chu commented Permalink

very timely subject - the nuances are important in such a hyper-political, overused term.

my work is similar to the innovative element - as a consultant and strategist that focuses on new programs and reorganizing existing programs, I find the post very useful.
keep writing!

6 Jason Fichtner commented Permalink

Nice blog post. I also read the 4-pager. You make good points and effectively caution that focusing on just reducing costs is too narrow to evaluate why businesses seek to outsource. Given the survey data you now have, it would also be interesting to note whether outsourcing is being driven by a desire to reduce regulatory and tax burdens and how strategic partnerships leverage comparative advantages with global trading partners. There's your next paper.

7 Elizabeth Meehan commented Permalink

What a great writeup Caitlin.
Outsourcing is something that is very relevant in our daily lives. It is interesting to look at how outsourcing is evolving to be more effective and efficient.

Looking forward to your future write ups!

8 Varun Dhameja commented Permalink

Good insight ! Believe we're living in a increasingly flat world, wherein sourcing for the best use of capital by organizations and thereby achieving competitive advantage is happening across the globe.

9 Ryan Swift commented Permalink

Great stuff Caitlin!

At EverFi our own technology platforms are disrupt in the EdTech space but we also outsource some of our development for the reasons you mention above. Cost is the obvious one but we also look closely at getting our platforms to market quickly so that we are able to secure the market and maintain our status as a leader to schools.
Outsourcing does bring some headaches though from a management perspective but at this point the benefits seem to outweigh these challenges/headaches.
Keep me posted on your future posts!

10 Kevin Fuller commented Permalink

Interesting topic Caitlin!

There's definitely much more to outsourcing than merely cost cutting nowadays. It's good to see sourcing executives raising their expectations for what's possible through outsourcing, but I'd be interested in seeing how these plans work out in practice though. Moving beyond simple cost-reduction can create all new headaches for the oursourcing firm in terms of monitoring/oversight, which needs to be weighed against the possible added benefits.
Good stuff!

Add a Comment Add a Comment