A sourcing strategy for enhancing core capabilities

Mark Gottfredson (Located in Dallas, is a partner with Bain & Company. (Mark.Gottfredson@Bain.com))
Stephen Phillips (Located in London, is a partner with Bain & Company. (Stephen.Phillips@Bain.com))

Strategy & Leadership

ISSN: 1087-8572

Publication date: 1 December 2005

Abstract

Purpose

Most companies focus on using outsourcing to achieve cost cutting. This article urges them instead to consider outsorcings potential for capability enhancement.

Design/methodology/approach

Reports on a handful of companies that place outsourcing – onshore or off – in a strategic context.

Findings

Leading companies start by analyzing not just where they can outsource to lower costs and improve quality, but which capabilities are vital to their core business.

Research limitations/implications

A recent Bain survey of large and medium‐sized companies reports that only 10 percent are highly satisfied with the costs they're saving, and a mere 6 percent are “highly satisfied” with offshore outsourcing overall.

Practical implications

Outsourcing has become so sophisticated that even functions like engineering, R&D, manufacturing, and marketing can be moved outside.

Originality/value

The authors show that it's no longer a company's ownership of capabilities that matters, but rather its ability to control and make the most of critical capabilities. In other words, capability sourcing has become strategic.

Keywords

Citation

Gottfredson, M. and Phillips, S. (2005), "A sourcing strategy for enhancing core capabilities", Strategy & Leadership, Vol. 33 No. 6, pp. 48-49. https://doi.org/10.1108/10878570510631675

Download as .RIS

Publisher

:

Emerald Group Publishing Limited

Copyright © 2005, Emerald Group Publishing Limited

Please note you might not have access to this content

You may be able to access this content by login via Shibboleth, Open Athens or with your Emerald account.
If you would like to contact us about accessing this content, click the button and fill out the form.
To rent this content from Deepdyve, please click the button.