The Outsourcing Dilemma - The Search for Competitiveness.pdf

how can an organization become and stay competitive 21
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Benchmarking and, perhaps, other techniques will be developed to highlight good
and poor performances within months of them occurring.
A range of management techniques, software systems and consultants with their
methodologies are on hand to provide salvation.
Sadly, a significant number of projects set up to achieve this salvation fail to meet the
main targets set for them. Failure can result from a variety of reasons, but quite often
it happens because management backs away from taking difficult decisions. There is
no sign that management is improving in this respect.
Even where a project has been successful, it does not mean that the improvement or
newly found competitiveness will automatically last for a significant amount of time.
It would be difficult to argue with the above summary but some managers studying it
might nevertheless come to the following conclusions.
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‘A negative benchmarking report would be damaging, but there is only so much I
can do to change and improve the existing structure.’
‘If so many performance improvement projects fail, why should I assume that any of
our competitors are going to achieve this, so called, world class’
‘Even if a competitor should achieve world class status, how long will they be able to
keep it’
‘Why should we be concerned by these developments’
The reason for concern
The reason why managers must now strive to be competitive
in everything is quite simple. In recent times it has
been proved that if the circumstances are right, it is possible
to obtain substantial service improvements and cost
savings from both core and non-core functions by involving
external specialists on a continuous basis. Furthermore,
it is possible to take action that will enable an organization
to obtain even greater improvements and savings in the
years ahead whilst passing much of the worry and responsibility
to a third party.
In June 1995 an article appeared in the Harvard
Business Review in which the Head of IT at BP Exploration
claimed that by outsourcing almost all his IT function to
it is possible to obtain
substantial service
improvements and
cost savings from
both core and noncore
functions by
involving external
specialists on a
continuous basis