OUTSOURCE

The exponential growth in network devices, bandwidth, services and data has opened new doors for outsourcing services. Companies who provide sub-contracting or outsourcing services as the industry calls it can help companies of all sizes harness the opportunities of the Intranet or Internet to improve on their bottom-line thereby increasing business productivity and efficiency.

When a company buys a license of a software product, they retain complete control of the product from the responsibility of maintaining the infrastructure to the software itself. In our opinion, that is just the tip of the iceberg; less obvious is the cost of retaining employees who possess both application and function expertise which ultimately adds up to the overall cost factors.

Everyone who has worked with any IT system of a corporate department knows that underneath all the glitter and glamour of new technologies lie the nightmarish problems of integration and maintenance. According to research and studies, the cost of integrating and maintaining an IT solution is three times more than the initial upfront costs of the software product itself.

Big or small companies that choose to outsource effectively capitalizes on the expertise and knowledge of the service provider. Depending on the project outsourced, they do not need to maintain any hardware or software costs. Outsourcing vendors like us strive to keep our solutions up-to-date and highly available. We strive to provide IT software solutions that keep up to our company's objectives of

Performance
Maintainability
Extensibility
Scalability
Availability
Security

For all the above reasons and more, we can provide a very cost-effective outsourcing solution to our customers.

So how do you know if your company require outsourcing needs ? In our experience in working with some smaller companies, some of the signs are

Inability to keep or, in some cases, have IT people and departments that maintain in-house systems and solutions.
Inability to keep up with the cost and time involved in keeping IT people trained and updated on technologies and systems.
Lack of expertise and knowledge involved in evaluating how the newer technological products can affect your company's day-to-day and back-office operations.

Last but not least, we strongly believe that no one software product fits all needs. And even if they do, they need a fair bit of tweaking before they can be fully customized to fit all the requirements. Once that is done, there is the dreaded question of integration and maintenance. Why waste all that time and energy deviating from the company's core competencies, we ask ? The economic theory of "economies of scale" is flouted here. Businesses would be more productive and generate greater efficiency if they stuck to their core competencies. In our opinion, every dollar spent on work outside of one's core competency will result in the equivalent of two dollars of revenue lost if they had stuck to their businesses' core competencies. That translates to three dollars lost for every unit of resource that is not deployed efficiently and effectively. Multiply that with all available unit of resources and time costs - Companies which don't leave it to the experts not only cannot generate more revenue than they should with their core expertise, they are effectively achieving a negative return-on-investment (ROI).

After a company decides to outsource, there will be other decisions to make, like what and when to outsource. Most companies choose to outsource functions that are not related directly to their core business. If you are not sure what to outsource, there are a few guidelines to work with to determine if these business functions should be outsourced :

If the company's functions or work processes don't create or defend their own competitive edge in their industry.
If the company's functions or work processes don't contribute directly to the company's bottom-line or its growth in their industry.
If the system to automate the company's functions or work processes cannot be built internally.

On a more personal note, having worked with a few "traditional-Asian" companies, I dare not declare I am an absolute academic on what I am going to say next. Businesses here still have the "Control-Freak" mentality in them. They still want total control of everything in their business. Even if they do see the tremendous business opportunities presented by embracing IT, or simply its potential of achieving greater business productivity and efficiency, these businesses are not willing to part with or sub-contract even their most remote business processes out. With all the recent flouting of privacy policies and bad practices abound, basic codes of business conducts and ethics are not held with high esteem and integrity and therefore I don't blame these companies for adopting this mentality. But there is a fine line between a "Control-Freak" mentality and a "Paranoid" mentality. I would only hope that with better regulatory guidelines and framework put in place, the mindset of these companies will change for it only requires businesses to "let-go" a little and they will gain a whole lot more.

William T
Chief Software Developer / Consultant
Softwaremaker.Net Private Limited