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Succeeding with sourcing of competencies in technology-intensive industries

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Abstract:

To avoid finishing last in a competitive race which requires its participants to master a range of things all at one time, more and more corporations are deciding to outsource subordinate aspects or competencies, thereby focusing their strategic spotlight on aspects more central to their business. Sourcing competencies in this manner is, however, accompanied by a wealth of difficulties. Mainly, the expertise encoded in a corporation's competencies has a regrettable tendency to leak from this corporation's sourcing-partners to its competitors, who then receive direct access to the corporation's competencies. In order to prevent this from happening, corporations must be better equipped to understand the competencies they intend to source and thereby ensure that only competencies or sub-competencies, which are of no strategic importance to the corporation, are sourced. Therefore, a major portion of this paper is constructed as a model designed to describe how corporations can employ competence understanding in making sourcing decisions.

Keywords: Competencies; Outsourcing; Supply-Chain Management; Technology

Document Type: Research Article

DOI: http://dx.doi.org/10.1108/14635770210442716

Publication date: September 18, 2002

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