Business transformation through outsourcing

Abstract

Outsourcing is rapidly evolving beyond the simple reengineering of support processes. For many companies, outsourcing partnerships are being used to achieve rapid, sustainable improvement in enterprise‐level performance. More specifically, in addition to the baseline value of reducing costs and offloading unimportant activities, partnership with an outsourcing vendor can be used to gain access to competitive skills, improve service levels, and increase the company’s ability to respond to changing business needs. To classify an outsourcing program as truly “business transformation”, it must change the way the client company works by using outsourcing to achieve a rapid, sustainable radical improvement in performance – as measured by dramatic growth, market repositioning or rapid diversification. The resulting performance improvement can be measured in dramatic gains in share price, market position and return on capital. In short, it is a comprehensive approach that seeks to create new capabilities and then use them to achieve a clear strategic objective. Business transformation outsourcing achieves results by integrating five essential process components: top‐level leadership, bold strategic agenda, innovative financial structure, outsourcing to transform critical processes, and focus on enterprise outcomes.

Citation

Linder, J.C., Cole, M.I. and Jacobson, A.L. (2002), "Business transformation through outsourcing", Strategy & Leadership, Vol. 30 No. 4, pp. 23-28. https://doi.org/10.1108/10878570210435342