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How Organizations can Elevate Business Performance through Advanced Document Process Management Industrialize Your Applications Delivery to Achieve High Performance The Power of Partnering in Accomplishing Your Green IT Agenda Taking a New Approach to Business Challenges Using Managed Services IT Gaining Greater Performance and Flexibility from Next Generation IT Outsourcing Suppliers Corner: Augmentum Helps Players Take Advantages of Opportunities in Healthcare IT 2.0 Guidebook - Evaluating the Business Impact of Oracle On Demand Total Cost of Ownership: Analysis of a Global Service Desk Undertaking Data-Protection Initiatives in Enterprise Systems Impact of Web 2.0 on Outsourcing Demystifying IT and Business Alignment through Tightly Integrated Process and Tools Model Best Practices: Integrating a Multishore Strategy into your Global IT Organization Intel's Second-Generation vPro Platform: A Steroid Shot for Desktop Outsourcing? 2008 Market Predictions: FAO, Global Sourcing, HRO, ITO, and PO Markets Modern Industrialization: Re-defining IT infrastructure to achieve high performance Information Technology Outsourcing (ITO) Joint Market Update IT Outsourcing 2.0: bridge to the data center of the future Information Technology Outsourcing (ITO) Market Update: Impact of the Service-Oriented Architecture Managing Outsourced IT with ITIL ITSM ITO Market Update: ADM Partnerships - Moving Beyond Labor Arbitrage Managed Services IT: Helping Caldwell Memorial Hospital become the Hospital of the Future |
How Outsourcing Facilitated a Sale By Mike Atwood, Principal, Everest Group
A major manufacturer wanted to purchase the company, but it had a problem with its manufacturing process. Company X's sales force was known for selling whatever its clients wanted; customization became standard. They also promised these customized systems in record time frames, which had its engineers scrambling to make the requested changes. In addition, Company X had a product plant in Ohio that only experienced a 33 percent utilization rate. Together, these gave the company two headaches its new owner did not want. The solution was to find a contract manufacturer who could engineer, then produce these customized systems for Company X. (Everest was the advisor in this transaction.) Outsourcing transformed its traditional supply chain into a build-to-order model. Now Company X has no inventory or waste. There are now no more fire sales for surveillance gear that's suddenly out-of-date. The outsourcer is only manufacturing what its customers order. Today Company X's sales force can concentrate on selling systems its customers want instead of the systems they have to sell. This produces a profitable product line for its new owner. Trend: Engineering Going Offshore to IndiaWhile most manufacturers are outsourcing the typical general administration processes like human resources, finance and accounting, purchasing, and IT, the new leap in outsourcing is in electronic manufacturing services (EMS). EMS outsourcers are bundling their engineering functions with the manufacturing of electronic components; this is exactly what Company X needed. Engineering is becoming the new outsourcing frontier. One of the big trends in EMS is sending more of the engineering work to India, where several new research and development centers have opened. Companies like Company X are seeing the value of sending lower-value engineering jobs to India. Companies who don't consider engineering a part of their core competency or the basis of their competitive edge are saying, "Why not outsource it?" Publish Date: February 2005
For more information... Copyright © 2005 - Everest Partners, L.P.
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Company X designs and manufactures devices installed in the ceilings of casinos that allow computers to track the movement of people. (The NBC show "Las Vegas" demonstrates their use in casino surveillance.)
