Why & How Outsource

Definitions

Outsourcing is a long-term, results-oriented relationship with an external service provider for activities traditionally performed within their company.

Offshore outsourcing (offshoring) means outsourcing to external service provider, whose principal base of operation is outside the country.

Benefits from outsourcing

Outsourcing is one of the powerful forces to improve company?s performance, no difference whether it is a small, mid-sized or big company.

In short term period you can see several advantages:

you can cut your costs up to 30-50% (low labor prices, no necessity to apply new people for new tasks)
you access the high-skilled specialists
you access world technologies and know-how
you can concentrate on the core activity, on the business strategy

If you are successful in outsourcing, the following long-term benefits appear:

you gain better market position
increase revenues
your company becomes more flexible and innovative

Factors for success in outsourcing

you are clear in your long- and short term strategic goals and objectives, you know exactly what are you going to get from outsourcing
the senior management/owners and employees of your company are committed to the outsourcing concept
you have chosen qualified and trusted service provider
the win-win relationships between client and provider are built
According to the research by Michael F. Corbett ("Leading Outsoucing Indicators"), the average organization believes that poor working relationships between itself and its providers are costing it more than 13 percent of the contract's (project's) potential value.

Some mistakes which can result in failure

choosing unqualified service provider - poor expertise, bad English language skills, irresponsibility
unclear goals and project requirements or constant changing of them
poor relationships and communications between the client and provider

	Research
	Development
	Embedded Development
	Quality Assurance