The Dangers of Outsourcing
RED HERRING | The Business of Technology
““There are many wrong reasons for outsourcing,” says Lily Mok, a senior consultant at People 3, a New Jersey-based human resources and IT research division of Connecticut-headquartered research firm Gartner. Companies may think they are saving money, she adds, but high costs are involved at the outset, namely related to infrastructure set up. … Reason: initial implementation could cost $400,000 per distribution center and $100,000 per store, plus an additional $35 to $40 million for systems integration of entire organizations, according to business consulting firm AT Kearney.”
While managers should be careful in hiring solutions providers, in-house RFID programs can be a risk and expense Wal-Mart suppliers cannot afford. AT Kearney’s figures are daunting but likely inaccurate for companies approaching RFID technology conservatively. ![[end]](/resources/bullet/cr80news-4.gif)
