Strategic Outsourcing: Lessons from a Systems Integrator

This article explores the question of how outsourcing works in practice. 'Telequip', a telecoms equipment supplier, adopted a core competency strategy under which activities outside its 'core business' of order fulfilment were to be outsourced. Detailed research on three of the outsourcing decisions which flowed from this strategy, including attending meetings between Telequip and its suppliers, led the author to conclude that in practice it wasn't all as neat as that. He argues that Telequip used its core competency strategy to get rid of problem-ridden business activities and that outsourcing risks loss of key skills.