WHY OUTSOURCE? Companies elect to outsource for a variety of reasons, some strategic and others tactical. In the past, outsourcing has often been used tactically, as a rapid and often short-term solution to a particular need or problem, which does not form part of an overall business strategy. Strategic sourcing means an organisation works with one or more suppliers in order to effect a significant improvement in business performance.

STRATEGIC REASONS FOR OUTSOURCING There is a growing popularity of adopting a strategic approach to sourcing. This stems from the simple fact that organisations adopting this method, appear to do well. Strategic sourcing is only likely to be effective and bring the desired results, if management is prepared to adopt a completely new perspective on management control. Organisations are more likely to meet their commercial objectives and maximise their success if they direct management control not so much towards controlling inputs, but rather towards focusing on the finished output. Some of the strategic objectives for pursing outsourcing may be: Free resources for mission-critical purposes Maintain flexibility Accelerate process improvement/re-engineering benefits Access current world-class capabilities or technologies Avoid technology obsolescence

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