Outsourcing of services has now been around for over three decades. This can benefit an organisation immensely either small, medium or larger respectively. Hence, outsourcing is the well-planned use of a specialised external resource to perform tasks that can be done in-house, imaginably a more appropriate term for this would be “smartsourcing”. Smartsourcing or rightsourcing is about knowing what to insoucrce and what to outsource and how to do it in the right way.
Smart-sourcing at present is increasingly becoming a best practice in the global economy. In-terms of sending tasks across boarders, the key question for many businesses is how a well managed outsourcing processes can translate into business improvement?
Koulopoulos (2016) explains globalisation is not just about cheap labor. There are three basic aspects that drive global outsourcing industry such as cost, education, and mobility. Everyone understands the process of wage differences can be used to reduce costs of a service or a product. What developed economies often underestimate is the degree to which secondary and post secondary education has accelerated in providing a skilled base of knowledge workers in other less developed economies. He further adds, “in Japan, for example, less than 1% of the population eligible for university actually attended in 1950. Today that number is greater than 25%. The same sort of shift is occurring today in India and China”. Therefore, without a doubt this move is making an impact on the availability of qualified workers for jobs that nations would never have considered before.
The even greater shift is in how easily work can be moved to wherever it makes the most sense. Mobility of work is natural with the the global trade and migration of workers to the new worlds. Once these trends are combined, the depth and impact of outsourcing is far more than what one can see outward on the global economy.
Smartsourcing and outsourcing
Koulopoulos, Roloff (2016) explains smartsourcing is not synonymous with outsourcing. Smartsourcing is not about economy of scale, just technology, ownership, cost cutting ,cheap labour, disjointed and just outsourcing. It is about economy of scope, competency, partnership, innovation, educated workers and joined. Unlike outsourcing, smartsourcing is meant not just to reduce costs and transfer the risks of a defined process to a third party.
Organisations need to focus their precious resources on what they do best in order to innovate on their core competencies. But, they also need partners who can continue to innovate on the non-core processes that they outsource. If an organisation just think about outsourcing the innovation a huge opportunity is lost. Smartsourcing in the meantime build relationships with the organisation and the vendor will positively lead to higher levels of innovation.
Smartsourcing is about moving the decision from art form to science. The concept helps a company to focus on its core business values, balance risks and opportunities, lower costs, increase innovation across all of its processes and finally to optimise all of these factors, socially and politically.
Generally, smartsourcing is a business decision but, like so many business decisions in today’s organisations, one cannot separate the business from the technology. It is important to consider how technology fits while doing the smartsourcing and the provider of smartsourcing link their technologies in order to achieve agility and accelerate innovation. Further it is sensible to make sure that process continues to keep pace with every other aspect of business after it’s been outsourced. In addition to the above smartsourcing requires greater synchronisation and coordination of processes that may reside with multiple partners. That is primarily a technology challenge.
Outsourcing to smartsourcing
Change in any industry is distressing, especially when the industry has passed it primary stages. It will be more painful, in the long run ignoring the change. On the contrary to what the governments stress, developed nations need to take opportunities of globalisation and face the challenges with a upgrading educational systems and workforce. For those nations or organisations who resist the change, the future will be resoluting on their inability to keep pace with success.