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Insights into attaining full benefits of offshoring and other sourcing alternatives

While many companies attempt to cut costs by simply moving work to an offshore outsourcer, the formula for reaping benefits by improving business process sourcing is much more complex, according to executives at a recent conference held by The Hackett Group, a business advisory firm.

 

One key element to success is to analyze end-to-end business processes carefully, and consider a range of possible sourcing options before deciding if one or perhaps several implemented in combination will best serve the company's needs. Several speakers also emphasized the importance in understanding core competencies and that companies should make sure they keep activities relating to their core business value in-house as they consider sourcing options. In addition, they explained that it is critical to build a comprehensive business case and strategic implementation plan that takes into account issues far beyond cost, including senior executive buy-in, governance, and how to build a truly cooperative relationship with the business partner.

 

According to Hackett chief research officer Richard Roth: ?Companies that reap the most benefits from making changes in business process sourcing do it by breaking down organizational silos and looking across their company to determine how best to structure an end-to-end process, whether it's procure-to-pay or IT network management, within their enterprise.

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