© 2004 Sixhills Consulting Perspectives on Technology OutsourcingThinking about OutsourcingBuilt on the understanding of resource needs and their groupings, the possible end-state is an organisation focused on its core competencies whilst delivering best-in-class service at lowest cost either in-house or from an external network of providersDefining The End State – The ‘Virtual’ Network Organisation • Functions/components that: – either can be outsourced to leverage the infrastructure of functional providers who have systematically superior economics– or not critical to maintaining core competencies• Associated infrastructure that is:– either crucial to sustaining core competencies – or in which internal capabilities can be consistently best-in-class and maintain competitive advantages (e.g., lowest cost)• Components that are critical to the franchise– analytical competencies– skills and experience– IPRDescriptionCoreCompetenciesExtendedEnterpriseCriticalInfrastructureCharacteristics of Core Competencies• Skills/knowledge sets• Limited in number• Unique source of leverage• Areas of dominance• Important to customers• Embedded in the organisationP5
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