New Areas Must Open to Outsourcing

RESEARCH TRIANGLE PARK, N.C. (TheStreet) -- Organizations have been under pressure for decades to reduce costs, and the pressure has been increasing steadily as the economy struggles and worldwide competition increases. It is no longer enough to examine "traditional" sources for performance improvement. To be competitive, companies must also think differently to change how they work.

Businesses used to paring costs by outsourcing functions such as manufacturing should consider looking at less traditional areas as well, including legal support.

For most organizations the opportunity to improve performance is associated with:

• Business processes
• Core competencies
• Cost structure
• Investment in resources, projects and people
• Strategic relationships
• Vendor and supply-chain management
• Customer-related activities

Each category can be pursued individually or with a linked strategy that affects multiple facets of operations. For instance, outsourcing can be based upon a decision to focus on product or technology development, customer experience or other proprietary processes that create the opportunity to use external resources whose own core competencies are in "operational" areas such as finance or customer call centers.

While outsourcing as been accepted for decades in finance, accounting and other back office activities, some areas of business have been shielded from the pressures to become more efficient, cost effective and process focused. Legal services, in particular, have often been accepted as an area that "costs what it costs" and is expected to rise as regulatory complexity and litigation rates continue to increase." That may no longer be the case, because organizations are finding it much harder to afford the rising costs of necessary and crucial legal services.