Outsourcing can be a "growth vitamin" for midmarket companies, with effects going beyond cutting costs and sending jobs overseas, according to a recent report.
Outsourcing is about "finding partners who can do what you need to do better than you can," according to an article by Gerry Mendelbaum and Mark Neibart, managing partners at Camber Advisors, a firm offering operational and technical expertise to private-equity firms and their portfolio partners.
Global competitors, the Internet marketplace, and higher customer expectations mean SMBs have to meet higher standards. They need to be able to compete with big companies with greater resources. And often they can't do that with a do-it-yourself approach, say Mendelbaum and Neibart.
Instead of focusing on cost cutting, SMBs are considering outsourcing to improve competitiveness in IT, as well as transportation, logistics, and procurement, the authors say.
For example, after superstorm Sandy hit in October, companies that outsourced IT to datacenters in multiple locations were more resilient.
Outsourcing can provide new technologies to enable growth, such as transaction processing and business intelligence, previously available only to bigger companies.
Outsourcing can help companies get specialized skills. For example:
When Alfred Angelo, a $100 million-plus manufacturer and retailer of wedding gowns and bridesmaid dresses, needed to get its products from its Chinese distribution center to a network of more than a thousand company-owned stores and independent retailers, and do so quickly and reliably, it turned to a major third-party logistics provider. Alfred Angelo could not have afforded to develop the systems and management tools, or the infrastructure, by itself. Its business is brides, not logistics.
Controlling capital costs: If your business needs new server capacity to meet a spike in demand, outsourcing to a cloud provider can let you avoid the need to buy new servers. Instead, just lease new capacity from your provider.
Increased efficiency: You can pass along costs for research, development, marketing, and distribution expenses to your outsourcing partner.
Reduced labor costs: You avoid the need to hire and train staff for short-term or peripheral projects.
Faster time to market: A good outsourcing firm can start a project quickly, while handling the project internally would require time to hire the right people, train them, and provide support.
Focus on the core business.
Reduce risk: If the new project turns out to be a failure, you just walk away from the outsourcing partner.
In addition to core IT functions, several IT-enabled business processes can benefit from outsourcing. Two examples: market research and cybersecurity.
Have you had much experience with outsourcing? What's the most interesting process you've handed over to outsourcers?
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In its mission to make car-buying simple, fair, and fun, TrueCar relies extensively on the Internet, social media, data, and -- increasingly -- mobile to reach its expanding audience of car dealers and consumers. The analysis firm is also relying on Mike Dunn, who joined TrueCar as chief technology officer on May 1, to help steer its technology investments and business priorities.
Marketing departments almost immediately latched onto Twitter as a great tool for spreading word about their brands, but Celina Insurance is using the microblog to help keep the entire company running in the case of emergency or disaster.
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When combined with training and management, today's affordable unified communications and collaboration solutions empower midsized organizations to be more efficient and productive. But only if you know how they work, and what they'll need to do their jobs even better.
Big-data has become a big point of emphasis for many businesses. While the technology is available to deploy these applications, the needed personnel often is not. As a result, analytic engineers' salaries have blown past the six-figure mark, and hiring these experts has become a challenge for IT managers.
New tools like laptops, tablets, smartphone, and wireless connectivity let us work from San Diego to Katmandu, and anywhere in between. But time management remains a problem.
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A survey by JD Powers found that customer interest in product features is lessening as phones evolve. Rather than features, price is driving purchases, and that change could have a dramatic impact on how IT departments secure these devices.
New York's Metropolitan Transit Authority is conducting a pilot test of digital kiosks to guide subway users to where they want to go more efficiently and at lower cost.
The whole Amazon.reader debate is a double-stupid. It's stupid to think that there's any e-book buyer who doesn't know Amazon's URL, and it was stupider to let ICANN launch the whole free-form TLD initiative to start with.
While NFC's original goal was to enhance mobile commerce applications, it is finding its way into a number of other uses, which is creating both opportunity as well as challenges for IT departments.
Enterprises would like to move to cloud computing but are hesitant because they are concerned about providers’ ability to secure company data. Here are some tips that help to ensure that if breaches occur, the business is not left holding the bag.
Edmunds separates customers into segments based on the info it collects on its site and from partners, and uses that to push out custom content, said Brian Baron, director of business analytics for Edmunds.com, at Predictive Analytics Innovation Summit.
The automotive website uses propensity modeling to target ads and customer registration forms, said Brian Baron, director of business analytics for Edmunds.com, at Predictive Analytics Innovation Summit.
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