ABSTRACT
This chapter highlights the main strategic factors that outsourcing can impact. Outsourcing allows clients to buy in already developed technologies, reducing development time and taking a good deal of the risk out of the development. Strategic outsourcing allows companies to lower their long-term capital investment and leverage their key competencies as many companies, including such illustrious names as Apple and Nike, have done. Strategic focus is more important than the individual decisions on what to outsource and what not to, as it guides all those individual decisions. As a broad principle for outsourcing, a firm should concentrate only on those core activities that enhance its unique marketplace advantages. As part of an overall strategy outsourcing may be able to give a client organisation competitive advantage. Outsourcing is a powerful strategic lever, which if effectively utilised by senior management can significantly differentiate the host organisation from its competitors.
