SLOVAKIA IS LEARNING THE ROPES OF OUTSOURCING

Outsourcing still finding its way in Slovakia

ONE WAY of cutting costs is through outsourcing, with savings amounting to 5 to 15 percent. That's the finding of an Everest Research Institute study, according to a report in the Hospodárske Noviny daily.

IT, human resources, and logistics are all areas suitable for outsourcing.IT, human resources, and logistics are all areas suitable for outsourcing. (Source: ČTK)

ONE WAY of cutting costs is through outsourcing, with savings amounting to 5 to 15 percent. That's the finding of an Everest Research Institute study, according to a report in the Hospodárske Noviny daily.

Today, outsourcing includes not only information and communication technologies, but also areas such as human resource management, logistics, accountancy, and training. The study compared the costs of operations, productivity changes, sales, and marketing. Savings resulted thanks mainly to the better effectiveness and cheaper operations of third parties.

While every company considers cutting costs a priority, firms must set short-term as well as long-term strategy goals when choosing the right model. "Many of the factors which are implemented in the short-term operational structure of costs for internal employees can actually be valuable as long-term investments, in order to achieve business and strategic effect," said Nikhil Rajpal, vice-president of global outsourcing at the Everest Research Institute.

When it comes to outsourcing, Slovakia is only at the outset, where cost savings are the basic motive for using such services. So far, it has not been a part of companies' strategic plans.
Major companies in Slovakia quite often tend to rely solely on their internal employees. For example, Vladimír Machalík, of Volkswagen, said: "Outsourcing is not an issue for Volkswagen Slovakia at the moment. Our goal is to train our own employees. We have special training programmes, thanks to which we can secure the best qualifications for them."

In the future, a steep rise in demand for the services of third parties is expected. "For small and medium-sized businesses, outsourcing will be crucial from the point of view of IT implementation, flexibility, and ability to measure the quality of IT services," said Rastislav Chudík, a marketing manager for the IT company, Tempest. Already, there are companies which use outsourcing as a matter of course. "In 2006, a total of about 300 employees left Slovak Telekom for other employers," said Jana Burdová, the company's spokesperson. "We outsource mainly support activities like transport, real estate administration, logistics, and press services."

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