Transformational Outsourcing

Executives began outsourcing substantial portions of their operations more than a decade ago to relieve activities stated they do not belong to the core business, reduce costs and to improve its strategic direction. Today, however, companies are looking outside for help for more fundamental reasons – a rapid organizational changes to make it easier to launch new strategies and to design new corporate boundaries. They are engaged in transformational outsourcing: partnering with another company to achieve rapid, substantia … Read more »

Executives began outsourcing substantial portions of their operations more than a decade ago to relieve activities stated they do not belong to the core business, reduce costs and to improve its strategic direction. Today, however, companies are looking outside for help for more fundamental reasons – a rapid organizational changes to make it easier to launch new strategies and to design new corporate boundaries. They are transformational outsourcing engagement: with another company to achieve rapid, significant and sustained improvement in enterprise-level performance partnership. Based on the research about 20 companies that have tried the practice, the author identifies four major categories that can benefit from organizational transformational outsourcing. Start-ups such as TiVo, for example, need partners to scale up quickly. “Crouching Tiger” as Family Christian Stores will be made by a deficiency in some key strategic capability of fulfilling their aspirations dashed. “Fallen Angels” – such as BP in the mid-1990s – satisfactory performance in the wrong way and need to take decisive action to change their tack. And organizations on the edge of survival – as Britain’s National Savings and Investments few years ago – have to be
transformational outsourcing “born again.”
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from
Jane Linder,
Juyne Linger
Source: MIT Sloan Management Review
9 sides.
Release date: 01 December, 2004. Prod #: SMR126-PDF-ENG
Transformational outsourcing HBR case solution