Growing More by Doing Less

Nation's Business - 2001

S.M.U.

"The Apparel Outsourcing Company"


"I believe I improve my quality and responsiveness to the market by outsourcing to experts the things that I'm not expert at. And if I can get to the market fast with the highest-quality products using outsourcing, I've won for the long term, too."

Winning is what outsourcing is all about. Small enterprises such as Innovative Medical are making outsourcing an increasingly popular - and profitable- way to do business. In fact, small firms that do a lot of

outsourcing tend to be more robust than their counterparts that do everything in-house, according to a survey of fast- growing small firms by Coopers & Lybrand a national accounting and professional-services provider.

Small firms in particular find outsourcing fits their business needs. In fact, business owners and outsourcing experts alike say that, at its best, outsourcing allows companies to concentrate on what they do best-their "core competencies." It enables them to have all other functions performed more efficiently at a lower cost and higher level of competency by companies that themselves are performing in their own key areas of expertise. Outsourcing makes good business sense for a number of important reasons, such as these:

กค         Costs Decline, Capital Is Freed - Outsourcing often reduces operating costs, mainly because outside providers of a single type of a single type of service have a lower cost structure gained form economies of scale. If an outside firm is providing the same service to multiple clients, it can be cost effective.

กค         Roadblocks Disappear - Someone else can be responsible for functions that have proven difficult to manage. An expert can handle growing or new functions for which a business has no internal resources.

กค         Strategic Advantages Emerge - Outsourcing helps small companies maintain a streamlined structure, closely manage growth, and spread risks. A business can expand rapidly by using outsourcing to deliver all the capabilities of a larger firm without the expense and delay of directly.

"Outsourcing enables companies to focus on core activities and increase flexibility by knowing when to farm out functions best done by others."

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