Outsourcing & Leadership

Outsourcing and leadership are two concepts that stick together as they strive to make a difference in the life of an organization through the enhancement of internal capacity and the advancement of strategic changes.

In outsourcing, companies “outsource” certain processes and functions to “external” third parties who will carry out the work, rather than the internal staff who could do it. This strategy in turn gives rise to company specialization and enables them to use the support of that expertise and those scale economies that refined suppliers have. The context outlined two potential areas for selective outsourcing at LG Display: customer service and the overseeing of an organization's IT infrastructure. These benefits are expected to be derived through reduction of costs of 15 to 25%, rise in flexibility according to resource demand from cyclic market life, innovation stimulation of freeing internal resources for the activity of the company, and operational efficiencies coming from utilization of the strong partners.

Though proper outsourcing programs are an effective way to address the issues involved, they indeed require a strong leadership to overcome the complexities linked with such tasks. The leadership in this case is characterized by a multipronged approach that cover the areas of setting up strategic goals and rationale for outsourcing, moving away from tactical cost-cutting framework and replacing it with a strategic repurposing one that is embedded on innovation and the usage of external resources. The leader is one of the main players in the process of transition and there are three major things that the leader needs to take care of which are the employee training, communication, and teamwork & collaboration.

On the other hand, leadership will develop effective governance mechanisms and cost-benefit analysis to choose between the vendors technical merits, price, communication style, quality orientation, scalability and cultural fit. Transparent communication channels – from top to bottom – enable everyone to talk freely about the benefits of flexibility, cost-cutting, and innovation which must be referred to and expressed clearly, without leaving the stakeholders with negative or unrealistic perceptions.

First of all, It advocates for the leaders to build mutual partnerships with the sub-contractors. It encourages them, in the process, to handle their vendors of the contract as the allies working together to meet a particular desire. Programmes like shadowing peers across teams, co-location, virtual meetings, and celebration of shared success can build trust, create transparency, and enable knowledge sharing amongst the organization and the partner. The goal of independent contractors is generating the desired outcome. The rules of engagement are founded on contracts. However, leaders need to cut above the contractual agreements and lead the way through interdependence that is based on shared goals.

Combining consulting with appropriate leadership can be very effective for organizations as they can utilize the outer resources, simplify the managerial processes, increase and enhance the innovation rate and evolve on the modern market.