Outsourcing: A cost-savings perspective

What is outsourcing? There is no such word according to Webster's dictionary; however, as used in the business world, outsourcing is a partnership or contract by a corporation with a third party to have the third party completely manage a particular corporate function or operations area. A common example of outsourcing that occurs in today's commercial marketplace can be seen in the management information systems field. Many large corporations (i.e., banks, insurance companies, utilities, etc.) are required to maintain vast computer networks and information systems to process the voluminous amounts of information that flow through the company each day. This computer center maintenance is usually a support function to the business's main line of work, but it is a necessary tool to allow the corporation to function efficiently in today's information-dominated society. While it is a fact that information is a crucial part of any business operation, processing and distributing that information is not and need not be and usually hinders a company in effectively pursuing its main line of work (e.g., making electricity). One western nuclear utility has outsourced its vendor engineering services to free its engineers from the humdrum task of updating and maintaining vendor technical manual (VTM) information and to allow them to concentrate on maintaining the plant at power, thereby increasing the overall plant capacity rating (i.e., increased profits). Having correct and accurate technical manual information is important for proper plant maintenance; however, on a day-to-day basis, VTMs do not directly support the plant at power and are therefore just one more administrative nightmare a systems engineer or maintenance engineer must deal with in his job