Amidst a storm around outsourcing in South Africa, let’s just take a step back and review the issue at hand. Determining how and when to outsource can be complicated. Even describing outsourcing is problematical and usually invokes emotional reactions.
In our previous blog post, we listed the advantages and disadvantages of outsourcing. So what are the actual reasons South African companies are turning to outsourcing as a solution? And is this really the best way forward?
Patrick Ashton, CEO of Cirrus commented: “Outsourcing of technical and administrative services allows customers to focus on their core business activities. In addition, customers can reduce their IT and business risk through implementation of strict SLAs with outsourced companies. For start-up or small companies the outsourced offerings are attractive. There is no heavy upfront capital commitments in order to get the business up and running quickly.”
Ms Tiny Modise, Sales Manager from Westech commented, “the main reason SA companies turn to outsourcing is to cut down the work load and to save money.”
And looking abroad, Chuck Cohn stated in a Forbes article that outsourcing can allow companies to do business more efficiently and effectively. \”One of the best ways to decide whether or not to outsource a task is to perform a cost/time calculation\”, says Cohn. He says while your business could perform these tasks in-house, the cost/time calculation will determine whether outsourcing is feasible.
A common thread without a doubt is that outsourcing of non-core functions is extremely beneficial. It enables companies to concentrate on their core competencies, which in turn offers the highest return on investment and hence delivers the most value to shareholders. Especially because the IT world is a continuously changing environment. Technology is evolving at a rapid rate every year and has become a major expense to most businesses.
We all need to tighten the belt and when it comes to saving, outsourcing is really the way to go.