1. Outsourcing - Where’s the Future?
SOCIETY FOR SCHOLARLY PUBLISHING
CONFERENCE
Randy S. Kiefer
June 8, 2006

2. How important a topic
Quick research on the phrase “outsourcing”
§ Google: 147,000,000
§ Financial Times: 10,742 (one year)
§ Wall Street Journal: 286 (one year)
§ Baltimore Sun: 51 (one year)
§ INFORMS: 24 (from 1998)
§ EBay: 8 (current listing)

3. Outsourcing: a working definition
• “The strategic use of outside resources to perform
activities traditionally handled by internal staff and
resources.” (“The Theory and Practice of Outsourcing” presented by Kudos
Information Systems, Ltd., Wilmslow, Cheshire, UK)
• Offshore vs. onshore
• Implications for quality control (QC) and
managerial oversight
• Impact of time and distance differentials
• Cultural differences

4. Why?
• Labor: cost savings, labor shortage, enhanced skill
sets, repurpose internal resources to other tasks
• Flexibility in scaling the business
• Offset risk of new “trial” venture
• Create the “remote office” for local exposure and
further expansion of markets
• Business continuity

5. The Risks
• Staff reaction (team development, self-protection,
rejection)
• Loss of control
• Intellectual property issues – privacy concerns
• Poor vendor choice
• Enhancing the vendor to offer same services to
others
• Unrealized gains in cost savings or technology
improvements
• Societal reaction

6. Examples
• IT is the most common
• Cisco – virtually all manufacturing
• Payroll – outsource to ADP or the like; those
firms have the work done in India
• Publishers – composition, typesetting, journal
hosting
• Lionel trains
• Medical dictation
• Dating services – eHarmony.com and
Match.com

7. Some Guidelines
• Is there an ethical dilemma in all of this?
• Know thyself – true for all types of BP issues
• Know your business FBR, BPD
• Vendor/supplier choice
• Contract issues
• Quality control, managerial control
• Time horizon flexibility
• Do the research
• Confirm the value

8. References
• Kudos Information, Ltd. (http://www.kudos-idd.com/)
• The Theory and Practice of Outsourcing
• Emerio Corporation Pte, Ltd (http://www.emeriocorp.com/)
• Secret of Organizational Success – Business Process Outsourcing by Ravi Kumar
Dasari
• The Everest Group (http://www.outsourcing-center.com/)
• Impact of Best Practices in Outsourcing Arrangements
• http://www.outsourcing-requests.com/center/jsp/requests/document/index.jsp?documentId=1851
• Financial Times (http://news.ft.com/)
• Mitigating Outsourcing’s Biggest Risks for 2006 by Bryce Canfield (Nov 05)
• Many, many others – always new material every week