Business Week Special Advertising Section

A PARTNERSHIP FOR SUCCESS
It is no secret that there is a fundamental transformation occurring in the nature of businesses today. More than a revolution, it is literally an explosion of innovation, as well as complexity and change that takes the form of new technologies, new enterprises and business strategies, and an extraordinary array of original products and services.

Common wisdom expounds that both the chicken and the egg -- the impetus and the answer -- for all this change is the information highway and its relentless drive toward e-business and virtual solutions for everything from buying toys to direct marketing to renting corporate applications. While for the most part that is correct, it is only part of the truth. The Internet is pushing us all toward new models of future business -- but the real solution to managing in this rapidly approaching, highly volatile, innovate-or-die Darwinian world is outsourcing.

The importance of innovation to business success at this point in time cannot be denied. Innovation has to be continuous, creative and fast. Companies cannot survive without finding product and service breakthroughs on a regular, predictable basis. That is why outsourcing and innovation have come together now. "The concept of outsourcing is increasingly used as a tool to assist innovation through providing information, procedures and business methodologies, new product development, and ongoing services," explains Frank Casale, president, The Outsourcing Institute. "Outsourcing is the only business strategy available today that works to continuously infuse new ideas, fresh perspectives and the flexibility to turn on a dime that is required for success in today's organizations," he adds.

Both buyers and sellers of outsourcing want to minimize the time, cost and complexity of finding the right match. The Outsourcing Institute is meeting this challenge through The Sourcing Exchange at www.outsourcing.com -- a channel developed to enable faster, more intelligent execution of outsourcing transactions.

Frank Casale, President, The Outsourcing Institute

Don't Live in the Past
The stodgy old worldview of outsourcing as a tactical solution for non-essential aspects of business is a thing of the past, and holding that opinion can mean ruin for any company maneuvering in today's business climate. The truth is that companies can't just go it alone.

Today companies are realizing the strategic advantages that outsourcing can bring to the table, including increased ROI, better flexibility to change, and access to best-in-class practices and services. But that is not all. Companies are also looking for and executing new and innovative ways to leverage outsourcing. Certainly outsourcing is considered an essential tool for developing e-business initiatives.

Develop Core, Outsource the Rest
It is easy to see how companies are using outsourcing to assist in the creation of innovation. Outsourcing frees companies to concentrate on core competencies and brings an infusion of knowledge and ideas, procedures and business methodologies to the drawing board and the boardroom. When companies pare down to their core capabilities, they can then choose to outsource anything, especially things that had previously been considered "inside jobs." When a company identifies its core competency, it needs to focus on that and outsource the rest -- hopefully to the best-in-class provider of those services.

Developing core competencies and using strategic outsourcing allows for greater concentration, leveraging and flexibility than ever before. It is also practical on a cost basis -- by outsourcing everything from research, to bottling, to distribution, companies claim to have gained a return rate from 75 to 90 percent.

Using outsourcing as a strategic tool in pursuit of innovation lets companies refocus resources and move faster. It gives them expertise they don't have in-house, brings added value to the table and allows each company to concentrate on what it does best in the innovation cycle.