Outsourcing Essay
Outsourcing has become a common practice in business in general and in electronic commerce in particular. However, along with numerous benefits, outsourcing also creates numerous risks such as the loss of control over e-business operations, lack of strategic alignment of corporate processes and operations, information leaks, etc (Lientz & Rea, 2009). In the presence of outsourcing, the company’s structure changes from integrated to distributed, and management approaches should be properly adjusted taking into account the risks of outsourcing. Therefore, if the company starts outsourcing some e-business activities, it should change its focus from tactical internal operations to strategic operations (Lientz & Rea, 2009).
It is important to develop an outsourcing strategy in such a way that the dependence on contractors does not create mission-critical risks (Braithwaite, 2002). In this context, the company should retain its core functions, such as management and supervision (Braithwaite, 2002), and other business-critical operations and capabilities. For maintaining business security and continuity, it is reasonable to outsource only those functions and processes which can be restored and do not form the company’s core capabilities.
From the perspective of retaining core capabilities and strategic focus, it is essential that the head of the business management function of an electronic commerce initiative is an employee of the company implementing the project. If business management functions of an e-commerce initiative are completely outsourced, there emerge high risks of losing control over e-commerce operations, losing clients or profits due to the lack of strategic alignment, or failing e-commerce initiatives if the contractors experience some issues. Furthermore, the presence of the head of the e-commerce business management function in the company’s internal team is necessary for setting the company’s strategic focus and objectives.
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