Successful Outsourcing in Organizations

When an organization considers outsourcing as an option, it's important that the outcome be:

• Higher efficiency
• Advanced access to strategic resources
• lower cost of doing business. 

An organization open to outsourcing broadens its network of high competency to its advantage and becomes an agile business able to compete in the ever changing business environment. Paek et, al., (2019)

In evaluating an outsourcing vendor, 3 essential success factors of the vendor are considered during the outsourcing strategy: (Delen, 2016)

• Efficient levels of communication in the vendor's organization- If the vendor's communication lines are efficient within it's organization, managing any challenges related to the outsourcing strategy are far easier
• Demand management- As an organization's demands fluctuates, a vendor should have the capacity to handle them and deliver its services effectively 
• A vendor's ability to adhere to the transition plans for smooth business operations performance during the period of transition 

An organization's decision on the specific activities to outsource should be very strategic. The benefits of outsourcing, especially financial benefits can be quickly eroded if the decision is not critically evaluated against a company's needs. Sanchís-Pedregosa et, al., (2018)

References
Delen, G.P., Peters, R.J., Verhoef, C. and Van Vlijmen, S.F.M., (2016). Lessons from Dutch IT-outsourcing success and failure. Science of Computer Programming, 130, pp.37-68. 

Paek, B., Kim, J., Park, J. and Lee, H., (2019). Outsourcing Strategies of Established Firms and Sustainable Competitiveness: Medical Device Firms. Sustainability, 11(17), p.4550.

Sanchís-Pedregosa, C., Gonzalez-Zamora, M.D.M. and Palacín-Sánchez, M.J., (2018). Outsource Services to Improve Financial Performance: Is There a Limit?. Global Business Review, 19(1), pp.21-31.

Culture and Agility

Organization culture

A system in place, in an organization, that has a huge influence on how an organization forms and implements strategies to achieve a certain outcome is known as organization culture. In depth, this system affects how employees interact amongst themselves and with their environment resulting in a certain strategy outcome. Balaji et al., (2020)

The 4 cultures and their impact on organization Agility

Agile organizations are those that can sense the changes taking place in their environments early and form the right response to these changes. This creates opportunities for new business giving them a competitive edge. Culture plays a huge role in how agile an organization is. Felipe et al.,(2017)

Below is a summary of cultures in organizations and their characteristics

Internal focus	Flexibility and discretion		external focus
	Clan culture: Focused on the well being of employees and creates a positive working atmosphere. Human capital focused. Family oriented.	Adhocracy Culture: Focus is on success with heavy investment in innovation. There is adaptability, flexibility and creativity in readiness for uncertain times
	Hierarchy culture:Extreme bureaucracy with strict control, top down management approach. Need for control and order to keep internal controls and efficiency in check	Market Culture: Focused on a goal, status, profitability etc. and aims at winning sales, contracts etc. with minimal delays
	Stability and control

Competitive Value framework (Cameron and Quinn, 1999)

An organization that can adopt to the different types of cultures is more likely to be effective and agile compared to competition. The business environment is increasingly turbulent, and organizations are faced with the huge challenge to succeed and remain going concerns. Embracing the right cultural mix and driving the same through its leadership is a step in the right direction.

References

Balaji, M.S., Jiang, Y., Singh, G. and Jha, S., (2020). Letting go or getting back: How organization culture shapes frontline employee response to customer incivility. Journal of Business Research, 111, pp.1-11.

Cameron, K.S., Quinn, R.E. (1999) Diagnosing and Changing Organizational Culture: Based on the Competing Values Framework, 1st ed.; Addison-Wesley: Reading, MA, USA.

Felipe, C.M., Roldán, J.L. and Leal-Rodríguez, A.L., (2017). Impact of organizational culture values on organizational agility. Sustainability, 9(12), p.2354.

Value in business

What is value

From an organization's perspective, value is deemed as loyalty from customers evidenced through their quick response to efforts of cross-selling and regularly reffering the organization to potential customers. Ulaga (2001)

From a customer's perspective, value is the quality and responsiveness they enjoy from an organization's product and services, their social interactions and the reduced level of anxiety through trust built over time with the organization. Ulaga (2001)

How to create value

One way to create value according to research by Amit and Zott(2012) is to  avail platforms on which your customer can interact with each other. 

These platforms create a networking effect for customers if made relevant.  They attract many customers enabling a wider customer base interaction. 

Such platforms provide consumers with opportunities to transact at lower costs and reduce their cost of searching for solutions given the interaction they enjoy with other customers.

In return, loyalty grows, trust is built, cross selling occurs and value continues to grow.

 References

Amit, R. and Zott, C., (2012). Creating value through business model innovation. 2012.

Ulaga, W., (2001). Customer value in business markets: an agenda for inquiry. Industrial Marketing Management, 30(4), pp.315-319.