IT Outsourcing: Why Consumer Goods Companies Should Embrace It


IT Outsourcing: Why Consumer Goods Companies Should Embrace It
IT Outsourcing: Why Consumer Goods Companies Should Embrace It

Date: 16.03.2018

All companies are looking to maximize their bottom lines, without cutting corners. Nearly every company that manages a supply chain will search far and wide to find suppliers that offer a high quality product or service, at the lowest possible price. Consumer goods companies are known to push this to extreme lengths. A great example of this principle in the consumer goods industry would be the round-the-world journey of a simple cotton t-shirt. There are numerous articles on this subject, and a recurring theme is that multiple countries can be involved in the production of a basic t-shirt, usually in a bizarre sequence, all in a bid to save costs without sacrifice. For example, cotton might be grown in the US, shipped to Bangladesh to be turned into a t-shirt, shipped to China to be dyed and printed, and then shipped back to the US to be sold at a profit. While consumer goods companies among others have extremely nimble supply chains, more often than not, the same can’t be said for the back end of their business. Many companies are continuing to grow their IT teams in bloated, uneconomical ways. Here are some likely reasons why major companies continue down an unprofitable path when it comes to IT. All of these can be easily overcame with the right outsourcing partner: Most of our IT capacity is in location X, and thus we’re stuck there unless we make major changes to our existing setup. In a world that’s become increasingly location independent (this article was written in Mexico City by a guy based in Montreal, working with a company in Bucharest- a company that in turn works with clients from around the world), it’s become increasingly common for teams to work together, on the same projects, at virtually the same time, thousands of kilometres apart. If you have a well suited outsourcing partner, in a well suited country, your outsourced team can work seamlessly with your in-house team. Also, you can start an outsourced team from just a single developer, without changing your current team whatsoever. Office space, recruitment, human resources, project management, legal costs… Merely getting our foot on the ground in a foreign country is too expensive to justify any future cost savings. For companies without the right partners, especially ones that try to set up their own offshore team without any external support… This might be entirely true. Fortunately, by working with a well established outsourcing partner, essentially all of these added costs are eliminated. Many leading outsourcing companies will cover all of these costs, and thus, their clients only end up paying for the cost of the personnel they wish to work with. Furthermore, the time delays associated with establishing a presence and a physical location, let alone recruitment, can often be eliminated by leveraging an effective outsourcing partner. Isn’t outsourcing is basically a way to cut corners? We might save on costs by outsourcing, but we’d pay the price in terms of quality. This is likely the biggest false stereotype about IT outsourcing today, and while there are excellent outsourcing companies as well as troubled ones, let alone markets, not all outsourcing is created equal. Take outsourcing markets for example. Outsourcing to some countries will enable you to save money at all costs (quality being one), while outsourcing to other countries might be so expensive that the main purpose of outsourcing to such locations is defeated. Fortunately, as we’ve wrote about in our other articles, Romania tends to offer some of the most cost competitive IT resources in the world today, while producing work that’s been consistently rated as being of high quality. Furthermore, some companies are particularly well suited to certain industries. For example, as we’ve had a long history of working with the likes of Procter and Gamble, we consider working with companies in the consumer goods industry to be one of our specialties. Leveraging an outsourcing partner that’s experienced and specialized in working with your industry is a great way to improve work quality and end outcomes. If IT outsourcing is a sound business decision, what are the implications? We believe that if companies in the consumer goods industry as a whole were to embrace IT outsourcing in the same way that they embrace supply chain offshoring, it could make the better part of the industry significantly more profitable- as IT is an increasingly large part of many consumer goods companies’ budgets. If you’re interested in learning more about how we work, or about what we’ve done for companies in the consumer goods industry, feel free to reach out to us.

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