Niyamath Parveez

Whatever major players in an industry do, it is inevitable that the smaller firms in the same competing field will look to do also. It is not merely a copycat exercise aimed to emulate the big firms but quite often, there can be very logical reasons for doing so. Firstly, if the major firms take to a style and it becomes a success, it has proven to be a winner in their field. With any advantage or success being pored over in great detail these days, anything which looks like working will be analyzed to death and this enables firms to see the exact details and how to copy the success stories.

This is very true for outsourcing and many small firms have been able to copy the procedures and methods utilized by big players in their field. It also means that there may be ready made suppliers desperate for work and they will be keen to work with the smaller firms in the industry. If two outsourcing firms are competing for a contract with a major player in an industry, only one is going to be successful. This means that the losing firm will have went to a lot of time and effort, including possible set-up costs for no benefit. One way to recoup these sunken costs is to target similar firms who may also be able to benefit from outsourcing. The size of contract may not be the level of the original one on offer but sometimes any return on investment is better than nothing and this will see firms getting a good level of benefit.

Sometimes, the economic pressures of trying to stay in contention with other firms can lead to firms adopting similar procedures and a very clear example of this is happening right now. Bharat Sanchar Nigam (or BSNL) has recently come to the decision that they are looking to find an outsourcing solution to their management structure problems and issues. They are also looking for external assistance in maintaining their towers and their large amount of cable networks. Although firms should always be looking to better and develop themselves these decisions have clearly been impacted upon by other players in their industry. Private companies such as Bharti Airtel or Reliance Communications, two huge firms in their industry have achieved a great deal of success with outsourcing moves and this has led many similar firms to re-evaluate their own processes.

To outsiders, this may seem like a move that is just following the line from bigger firms but when you consider that industry experts believe this decision will save around $1m for BSNL, it is very apparent why the firm is deciding to act in this manner. In these harsh economic times, this sort of money has to be pursued strongly and any firm in a similar position would be doing the same. There can be a lot of discussion about the benefits of outsourcing but when the bottom line is so obvious, it is hardly meriting a lengthy debate.

Given the current economic crisis, many firms and entities are looking to organize themselves better in order to remain economically prudent at these difficult times. Previously, many firms were happy to give over their entire outsourcing business to other companies but now these major deals could be coming to an end. This was the previous best partnership solution for many companies working in the IT and telecom industries but as these are rapidly moving areas and it is about time to examine if another way may not be more palatable to a business and their needs.

Selective outsourcing is the new way forward for a number of industries and it is easy to see why. When so much importance is being placed on one relationship or entity, then the thought of something going wrong can be massively damaging to a company. If one supplier can make a mistake or be late with a delivery, it could have potentially disastrous consequences so it is better to have a shared responsibility. This will have negative points in the fact that bulk buying will not be as easy but for many firms, having the greater safeguard is worth the extra money.
This news may provide a great deal of benefits to the smaller firms around the world who may now find themselves able to enter the outsourcing market. Previously, only the major firms with a strong reputation and able to undercut the opposition were in a position to work with medium to major firms but the rules have all changed regarding this matter now. The opportunity to be a part of a bigger supply chain will see many companies tendering for more work and perhaps being able to obtain more work than what they would have previously obtained. Given the current economic climate, this is a fantastic opportunity for many different suppliers to prolong their financial future and remain solvent for a greater period of time.

And that is always the thing to remember about outsourcing, money is important but it does not have to be the only factor. When using an outsourcing supplier, it is important to think about the quality of service that is received from the partner. If the service is of a very poor quality, no matter how cheap the provision is, it will not be worth paying the price. It has to be remembered that poor quality or service will not be accepted by the end consumer so the firm needs to be aware that every element of the chain will be up to a standard to impress end users.

The opportunity to freshen up your supply chain management and lessen the risk involved is a major benefit to the major firms and there is an opportunity for smaller firms to earn themselves more work. It can be seen that the changing world of outsourcing is going to provide a whole world of opportunities for a great number of firms and may be the solution for some of the difficulties experienced by many of the firms today.