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Logic of outsourcing can be hard to resist

Stefan Stern

Financial Times

20 September 2013



PA is quoted in an article that looks at why companies struggle to get outsourcing right. The article points out that, when outsourcing first became a popular business practice two decades ago, some executives mistakenly believed they had found a neat solution to their problems. 

In the article, PA explains that intelligent outsourcing can provide businesses with the sort of flexibility they need to be able to compete successfully, and grow. "In the wake of the financial crisis, some companies have cut their cost base very deep, and are not in a position to rebuild that cost base”. “So they have to use third parties in a smart way."

"Say you were a bank or a retailer setting up in a new market. Do you really need to build your own systems, hire all your own people," he asks. 

"The outsourcing route allows you to use a third party to build a platform ahead of the competition, and not struggle with legacy structures. "You can do this flexibly, for two to three years rather than seven, build quickly, fail fast and move on if necessary."

PA explains further: "What is really core to your business? Do you need your own R&D team? Or are you really a branding company? Other people can handle logistics, procurement, do the product development – your job is to market it." 

But before selling a too optimistic version of outsourcing, PA goes on to add: "The talent needed to run these [outsourced] operations is in short supply, and expensive. Business acumen, managing suppliers, and those other sorts of relationship skills, are rarely found in one individual. How do you find and develop people for these roles? It’s not easy."

To find out how PA can help your business think differently about shared services and outsourcing, click here or contact us now.

You can read the article in full here.

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