Outsourcing - where it started.

I've spent over 15 years of my life fully immersed in the world of outsourcing. Let's take a trip down memory lane to the late 1980s when MC Hammer had happy pants as the pinnacle of fashion.

A time of fluorescent happy pants (yes, I confess, I rocked a pair as a kid) and also when outsourcing as a business strategy really took off. At this time outsourcing was just starting as a cost-saving policy that cleverly handed over non-crucial features and services to external parties.

Believe it or not, the trailblazer of formal outsourcing was none other than Eastman Kodak. Yes, you heard that right, Kodak! This photography giant found itself drowning in billions of dollars of debt thanks to their aggressive acquisition spree and other well-documented reasons. As a global brand under intense financial pressure, Kodak needed to trim costs and boost profitability. So, in 1989, they took a leap of faith and outsourced their information processing to IBM.

Kodak's audacious decision to outsource the very systems that supported their entire business was considered revolutionary at the time. Sure, it didn't save them from their ultimate demise, but that was more due to corporate mismanagement and underestimating the digital photography revolution rather than a failed outsourcing strategy. Oops!

The next chapter in the outsourcing story took us further afield, offshore, to be exact. Offshoring became the logical outcome of advancements in telecommunication technology and the mingling of cultures between different countries (ah, the wonders of globalization!).

Businesses yearned to capitalise on the opportunity to tap into cheaper labor rates compared to their in-house counterparts. Offshoring offered this tantalizing possibility while providing companies with the ability to boost productivity. How? By squeezing out every possible hour of work from the expanded workforce.

Outsourcing, especially when going offshore, proves to be a fantastic avenue for reducing costs, enhancing productivity, and enjoying more hours to fuel business growth. It's like a triple threat of efficiency, folks!

I'm Kane from Active Outsourcing (www.activeoutsourcing.com.au) and for a glorious 15 plus years, I've been playing in the dark and mysterious world of outsourcing, dabbling in everything from starting the outsourcing team at Moore Stephens to managing the National Deloitte Outsourcing team in Australia.

So, buckle up and get ready to explore the wild world of outsourcing with me. We'll unravel its quirks, pitfalls, and triumphs, hopefully all with a touch of wit and humor.

Please feel free to get comfortable and soak it up on various outsourcing topics then drop me a message or send an email kane@activeoutsourcing.com.au if you're itching to ask me something about outsourcing and what it can offer you and your accountancy firm.