Evaluating the past is necessary in order to determine the future as we could find useful and salvageable models. The modern hospital is such a model for outsourcing.
Early in the days, hospitals barely had effective medicines and operations were catastrophic. Between the 19th and the 20th century, hospitals had a way better chance of improving health as medicine became “scientific”.
As health alongside the hospitals in developed countries, sicknesses like tuberculosis, cholera began to receive less focus as hospitals concentrated on more challenging issues like cancer, genetic research and heart disease.
To meet up with the new challenges, hospitals needed advanced and sophisticated equipments. It was no longer enough to have lots of beds and test tubes in labs. Although medical practitioners were talented, they lacked the required training to utilize and maintain these modern equipments. Hence, outsourcing became very important.
Now, a network of organizations such as insurance groups, government organizations, education, specialty clinics as well as the recent data outsourcers (who make use of tools like IBM Watson) is working together to treat patients.
Let us analyse how the transformation of hospitals foretell the evolution of outsourcing.
Outsourcing of the last generation: In nations like China and India, outsourcing used to be induced by lower wages. Businesses hired more people offshore than they had onshore. However, offshore companies had less equipment and were less automated. The mode of work had to change, but the goals of all parties were met. The offshore economy had to spend money purchasing equipment which raised operational cost and slowed down implementation.
Size: While Europe and the United States already had big factories handling car and airplane production, outsourcing completely scaled when it was moved to China. Over the past 10 years, China built over 500 new cities in order to accommodate workers that would be needed by new industries. This scaling of operations created a new type of outsourcing. For instance, outsourcing industries that assemble electronic parts.
Increased reliability: In the early days of outsourcing, it was perceived as unreliable. Some projects like “Lift and Shift” failed. With the scaling of outsourcing at the beginning of the 21st century, about 50% of outsourcing was a success. Those who failed lacked necessary skills, or skipped some steps. Outsourcing has now become more successful generally, especially when creditable outsourcing sites are engaged.
Computer support: Large industries used to run their own IT department, right now the likes of Microsoft Azure and Amazon Web Services (AWS) handle IT responsibilities of plenty enterprise. For small businesses in America, market places like Amazon have literally snapped up warehousing and distribution.
Advancement in automation and robot invention via technology are revolutionizing manufacturing models, which is leading to more business activities being outsourced, hence the need for multi-dimensional outsourcing.
Daven Michaels is a New York Times Best Selling Author and CEO of premiere global outsourcing company, 123Employee. The company employs hundreds of young bright individuals on three continents. His International event, Beyond Marketing Live! inspires entrepreneurs build & grow their business with revolutionary new theories and systems allowing them to design the business and personal lifestyle of their dreams.