Friday, May 1, 2009

Business Transformation : Technology Outsourcing route

Technology outsourcing is the best optimization of cost, for an organization. Definitely, on the cost front outsourcing had a major advantage . However , same could be mentioned on the strategic front too . The client company could concentrate on doing what it does best , and leave the rest to the vendor companies . This strategic advantage can be termed as Core Competency going with C.K Pralahad's definition . However , 2500 years back a spiritual leader had also commented on it . Though, his coinages where different , Sri Krishna talked about the same concept of 'Core competency' in his coinage of 'Swadharma" .

In his advises to Arjuna , he mentioned about 'Swadharma' and why one should always stick to his 'swadharma' . Though thid term could be used in Organisational context , it was originally meant for individual usage . However,the stretching still brings a new perspective , that as there is individual swadharma , there should be an organizational swadharma too . It could be referred as the soul of organization and what meant to do .

If an organization , finds its core competency and concentrates then it actually does something very different , even if it is doing the same old thing . Some way the organization attunes with that Organizational soul . This itself is an transforming experience as it makes the organization aligned to an higher direction , without conscious intervention . In that point , it was very important for the company , to move out from the chores, where it did not have such kind of core competency .

Technology outsourcing plays a key role here, and gives the Company the important tool of functioning, in the sphere of the core competency. Needless to say it creates a huge impact on the Corporate spending . I am reminded my favourite wisdom quote that Milton Friedman conveyed in his "four ways to spend money" in an interview with Fox News:

"There are four ways in which you can spend money. You can spend your own money on yourself. When you do that, why then you really watch out what you’re doing, and you try to get the most for your money. Then you can spend your own money on somebody else. For example, I buy a birthday present for someone. Well, then I’m not so careful about the content of the present, but I’m very careful about the cost. Then, I can spend somebody else’s money on myself. And if I spend somebody else’s money on myself, then I’m sure going to have a good lunch! Finally, I can spend somebody else’s money on somebody else. And if I spend somebody else’s money on somebody else, I’m not concerned about how much it is, and I’m not concerned about what I get. And that’s government. And that’s close to 40% of our national income."

Spending the organization money on somebody else , is where the organization always tries to get best out of the money . That is the inner philosophy , which made outsourcing such a successful practice, and transforming experience for Business.

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