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4 Outsourcing Lessons IT Can Learn From Automakers
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SaneIT
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SaneIT,
User Rank: Ninja
10/3/2014 | 7:59:37 AM
Re: Don't Confuse Outsourcing with Offshoring
@hh0927,

I see the same mindset, it's not outsourcing unless the job is going overseas, but I think that's just a funny way our language works.  Companies subcontract jobs to the business down the street and it feels different because they can pop in to check out the progress and feel like they have more input.  Outsourcing in our language feels like letting go and letting someone else do everything within the parameters of the contract.  It doesn't have to be that different but since it often feels different to us we tend to refer to it in different ways. We use a lot of freelance labor because keeping a full time staff would be crippling during our slow periods.  When we ramp up we need reliable people who work like they are full time staff so we treat them as such.  The only difference is on paper and that's really how outsourcing to a local company should work.

 
batye
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batye,
User Rank: Ninja
10/1/2014 | 12:31:56 AM
Re: service vs products
@nasimson I could not agree more, and I trust you are right... as we need to see this point...  product and service... but this days this line is getting thinner... as service become product or product get sold as a service... how I see it...
batye
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batye,
User Rank: Ninja
10/1/2014 | 12:20:25 AM
Re: Don't Confuse Outsourcing with Offshoring
@hho927 it seems like happens everywhere... what ever we like it or not... sad reality of our global economy...
nasimson
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nasimson,
User Rank: Ninja
9/30/2014 | 12:33:49 PM
service vs products
We are missing on one important factor here:

Automakers source for component parts. Thats a product.

IT outsourcers source for IT services. Thats a service. 

The intangibility, human element, non-storage, lack of standardization and age of discipline, distance between principal and outsourcer, difficulty to audit ... all these create lot of difference. And these differences are critical.
hho927
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hho927,
User Rank: Ninja
9/29/2014 | 4:38:44 PM
Re: Don't Confuse Outsourcing with Offshoring
I don't know but after working for several companies.

When we say outsource, it means jobs are giving to oversea.

If we move some work to domestic companies, we call them subcontractors/IT consulting.
Number 6
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Number 6,
User Rank: Moderator
9/29/2014 | 12:59:09 PM
Don't Confuse Outsourcing with Offshoring
Some commenters are confusing the two terms.

Outsourcing is moving a process or function from your firm to another firm. It can be in the same country. This is what the article is about.

Offshoring is moving a process or function to another country. It can be another office of the same firm.

Offshore outsourcing is the combination of the two: another firm in another country.
SunitaT0
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SunitaT0,
User Rank: Ninja
9/27/2014 | 1:04:01 AM
Re: Apple VS Orange
"Software/IT can change in days. That's the reason Agile software developement method is the most pouplar method. We outsourced some of our work, seriously! It takes more time to explain, re-write requirements for oversea programmers than to do it ourself."
@hho297: Surely there are some overheads for outsourcing stuff (especially software) but we are doing this everyday. Not everything can be done under the same canopy, help is needed from everywhere. Every single company third parties some of its work for better functioning.
SunitaT0
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SunitaT0,
User Rank: Ninja
9/27/2014 | 1:01:18 AM
Making components in-house
"As companies outsource more IT functions, their technology expertise is dwindling. This makes it difficult to evaluate services and know if they're really getting what they need for what they're paying. Automakers avoid this problem by retaining engineering expertise even as they source great swaths of work. One way is to keep the production of certain parts in-house. "



Having certain production parts in house means better control on finances and managerial abilities. It is true that not all work should be availed from third parties. Internal factories have to come in the equation as well. We're thinking better equipment=third parties but that isn't always the case. Third parties are nt associated with the design and work principles in-house therefore there is a mismatch when it comes to work.
hho927
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hho927,
User Rank: Ninja
9/26/2014 | 1:10:45 PM
Apple VS Orange
The combustion engine is still the same for centuries (maybe it get more efficient but that's about it)

The connectors shape may be change. But they are still the same for centuries.

The frame/body may change yearly.

Software/IT can change in days. That's the reason Agile software developement method is the most pouplar method. We outsourced some of our work, seriously! It takes more time to explain, re-write requirements for oversea programmers than to do it ourself.
yalanand
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yalanand,
User Rank: Ninja
9/26/2014 | 12:18:20 PM
Re: Too many components
@zaious: Indeed. Having too many components sent offshore may be a different take on the marketing status of the automotive industry, and offshoring isn't the solution to everything. Not only are there recurred costs but there are also unforeseen expenditures if we offshore components. We can onshore components and offshore the software because software can be built anywhere with a powerful team.
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