Do enterprises really outsource the right things ?

Some of my reflections point to the slow but unavoidable outsourcing of the human side of the enterprise.

First because of organization models and systems that allow companies to focus on their core business : identifying key issues and needs, they can concentrate on elaboring a stragegy to respond…and let others do the rest. The rest, from innovation to delivery can be fully outsourced, to the general public or specialized partnes whose small size helps them being really agile and reactive. This organization model provides even more satisfaction to partners than if they were employed within the company. So, large businesses’ performance will highly rely on its ability to fin right answers and organize the competence chain to deliver.

We also have to know that incurate tools and organization causing high costs to access that so important ressource that internal information has become, Coase law could apply in reverse since outside expertise and knowledge is cheaper than internal one.

Then, and this previous post was only an example among many others, because knowledge process outsourcing becomes a real market and a source of growth for many countries that want to jump on this train et benefit from what will be their industrial revolution, putting an incredible presse on occidental companies that may see the advantages to outsource their knowledge processes.

There’s a simple reason to all that : since machines were there to imporve activities’ scalability, knowledge related activities still rely on people’s time. Even if some are slowers than others, it’s useless to replace them by more productive ones when the purpose is more qualitative than productive, the only solution is to hire more people, with the consequences we know about costs. Which must make us wonder more than ever on the question of work related costs in our occidental economies.

Sure, things will get balanced one day or the other, than one day the Indian worker will be as expensive as the european worker. But when ? Perhaps too late. And we can’t be sure there will never be a “new India”.

In brief, although it may looks very attractive, this trend is not a good thing for our economies.

Another point is that, since we all know in a knowledge economy people will be companies’ more important wealth, businesses are doing exactly the opposite of what they should : they keep control of their tools and outsource their people.

Whatever we could say, many IT depts step on the brakes as soon as they hear the word “Saas”, although the fact they will more and more need larger and more complex infrastructures to store more and more datas, will make it inevitable according to the experts.

It’s a strange paradox to see competences, skilles, expertises, slowly going out of companies that, at the same time, don’t want their information systems to go out of their firewal : common sense would make companies keep their people, their knowledge and outsource their IT. I can’t see the benefits of investing in technologies that allow businesses to take the most of their talents if the talents have left the company.

Head of People and Business Delivery @Emakina / Former consulting director / Crossroads of people, business and technology / Speaker / Compulsive traveler
Head of People and Business Delivery @Emakina / Former consulting director / Crossroads of people, business and technology / Speaker / Compulsive traveler

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