John Doucette, CIO of United Technologies, states that 'If you're not the lowest-cost provider of that service, you need to contract it out' (Overby 2003). However, central to the Zappos business model and its success was to make insourcing decisions based on the criticality of the function to customer service. Based on the readings in the 'Outsourcing' section and your own experience or research of outsourcing, how viable do you think outsourcing is as a human capital strategy? You may wish to consider one or more of the questions below in your response. These are suggestions only. You can consider other issues: · With pressures on costs, is outsourcing inevitable? · Does outsourcing give businesses a competitive edge? · What needs to be done to make outsourcing successful? · Should outsourcing always be under consideration as part of an organisation's · strategic HR management? Outsourcing in Australia has become big in the past few years as more and more companies learn about the advantages of shifting some of their operations offshore or to a third-party provider. There are a number of reasons companies outsource, which include: Flexibility. Through outsourcing, companies are able to build a business that scales. This is because they are not tied up to backend office tasks that, although mundane and tedious, are critical to effective business operations. Since they can now afford more time for developing their core competencies, companies have greater flexibility and more opportunities to scale. Low entry cost. Running an outsourced business model can make it possible to break into other industries at the lowest entry cost possible. And where entry cost is low, the risks are relatively low. For example, companies can outsource the production and distribution of their product, eliminating the need to invest in machinery, labour and logistics. Access to technology. For small Australian businesses, outsourcing is their ticket to accessing advanced accounting programs or IT infrastructure that they can't otherwise afford themselves. Get closer to clients and market opportunities. Many companies find that farming out their production or operations to offshore locations takes them closer to end users and grants them access to new business opportunities.