Fri, 21-Nov-2008
Outsourcing the headache
Eckardt
Published: Aug 26, 2008
Global - Many companies choose outsourcing as a means to deal with a situation they are unable to handle internally but this may be counterproductive, said Infineon Technologies senior procurement director.
Speaking at the ACTE Asia Pacific Conference 2008 in Singapore, Reinhard Eckardt, senior director of Infineon Technologies said buyers should think carefully before they take the outsourcing leap.
According to him, the effort needed to manage the outsourcing party goes largely underestimated. In some cases, buyers may find that they are utilising nearly as much manpower managing the outsourced partner as if they did it themselves.
Further, he warned buyers that many outsourced service providers use the initial period with the client to get their inexperience employees and fresh graduates trained. "This way, the [buying] company pays to train their outsourced partner's employee," Eckardt said, stressing that buyers should demand an employee who is close to the business as their business partner, or renegotiate their terms.
Another often forgotten rule of thumb of outsourcing is that buyers should only outsource if the process is not their core competence or has no strategic value to their business, and not because they are unable to handle the process themselves.
"Outsourcing is not the answer to internal problems," he said. "It will only increase it."
Speaking at the ACTE Asia Pacific Conference 2008 in Singapore, Reinhard Eckardt, senior director of Infineon Technologies said buyers should think carefully before they take the outsourcing leap.
According to him, the effort needed to manage the outsourcing party goes largely underestimated. In some cases, buyers may find that they are utilising nearly as much manpower managing the outsourced partner as if they did it themselves.
Further, he warned buyers that many outsourced service providers use the initial period with the client to get their inexperience employees and fresh graduates trained. "This way, the [buying] company pays to train their outsourced partner's employee," Eckardt said, stressing that buyers should demand an employee who is close to the business as their business partner, or renegotiate their terms.
Another often forgotten rule of thumb of outsourcing is that buyers should only outsource if the process is not their core competence or has no strategic value to their business, and not because they are unable to handle the process themselves.
"Outsourcing is not the answer to internal problems," he said. "It will only increase it."
