Why outsourcing is a bad idea

Nice video.

I've noticed a lot of companies shifting their extra work to in house. For example my new employer is now bringing their development work in-house after outsourcing it. Which I believe will yield better results all around, including quality of work.

In that video it mentions Apple - who we all know outsource their work to Foxconn in China. Will moving their manufacturing process to the States compromise the quality of their products I wonder?
 
There is a difference to outsourcing some components that make up the company to that of outsourcing your company's key elements.

Nothing is wrong outsourcing transport for example when you are into wholesale vs outsourcing your entire warehouse and stock holding.
Transport is not key to your company and there are so many others that you can replace em with at the drop of a hat, while outsourcing your warehouse place you in the "stock holder's" hands and would be costly to switch.

Apple for example outsourced their Company, and that is where things can go very wrong.
 
Didn't watch the video, but from work experience (and studies), the following tend to happen:

1. Company doesn't do well
2. Executives bonuses are at risk
3. Quickly retrench staff and outsource functions
4. Finances look good for 2 years
5. Executives gets bonuses
6. Executives leave
7. Company realise that they outsourced their core competencies
8. Company starts doing worse
9. Company restructures
10. Company loses competitive advantage
11. Company starts bring the work in-house again
12. Rinse and Repeat

Outsourcing of key functions is death to a company and tend to be done with a short team view.
 
Outsourcing of a business' key functions is obviously NOT intelligent for a business' long term well-being, but there are some instances where outsourcing makes a lot of sense, especially in the current South African business environment, where red tape can make employment a very risky endeavor. It then also depends on who you outsource to. As with all things, you get what you pay for.
 
creeper said:
Didn't watch the video, but from work experience (and studies), the following tend to happen:

1. Company doesn't do well
2. Executives bonuses are at risk
3. Quickly retrench staff and outsource functions
4. Finances look good for 2 years
5. Executives gets bonuses
6. Executives leave
7. Company realise that they outsourced their core competencies
8. Company starts doing worse
9. Company restructures
10. Company loses competitive advantage
11. Company starts bring the work in-house again
12. Rinse and Repeat

Outsourcing of key functions is death to a company and tend to be done with a short team view.
Click to expand...

I have seen this happen so many times.. it's not even funny.
 
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