Complete an analysis of the outsourcing of capabilities to achieve optimal coordination of inter-functional operational processes and inter-organizational collaboration across the whole value chain. Consider the need for new kinds of relationships with suppliers.
"Outsourcing can provide numerous benefits to companies by giving them ability to leverage suppliers' scale, expertise and systems; access supplier's labor and even capital costs; provide higher quality and more stable processes" (Fainsilber & Chadwick, n.d). The drive for increased efficiencies and cost savings has forced many organizations to specialize in limited areas of excellence. Outsourcing can help companies keep critical operations in-house and source redundant services to third-party providers so that they can focus on core businesses. Organizations benefit by getting access to supplier's specialist capabilities in a range of business functions. By leveraging capabilities of suppliers organizations are able to outsource even critical business functions and themselves drive core internal capabilities which provide competitive advantage. However, in the process of getting into the outsourcing race many companies fail to look at the big picture and make decisions for piecemeal outsourcing. Classic customers of outsourcing work with outsourcers to work on only one part of the value chain. In some cases, organizations outsource critical functions which should have been kept in-house and suffer because of wrong decision. Competitive advantage in dynamic environment also requires organizations to integrate knowledge and capabilities ...
Inter-functional operational processes and inter-organization collaborations are examined. The relationship with suppliers is determined.