As Williamson points out there are many costs to consider. For example, what kind of time, training and resources will have to be committed internally vs. externally, and can those investments be repurposed? What if modifications are necessary, does everything come to a screeching halt while you renegotiate your contract with a supplier? How much visibility do you give up? And, does it increase your risk of a significant supply chain disruption, or a create quality issue that could be costly to you reputation?
The list of pro and cons is endless, which is why the work Oliver Williamson did was Nobel Prize worthy -- he changed the way microeconomists view corporate decision-making processes and delivered something that can be applied to any company looking to create an outsourcing strategy.
Which direction are you leaning? Will your company be outsourcing more or less in the years to come, and what insights can you share with the Logipi community that could help others with their sourcing strategies?
Nobel Prize Winners Provide Insight on Outsourcing, Contract Work
