Driving Home Point - An Outsourcing Story in China

Several years ago, I visited Beijing for the first time. At Beijing airport, I got a taxi and paid 450 yuan (about U.S. $ 54) to get to the city. I was horrified to learn later that the normal taxi fare for the same distance is 60 yuan! Another time, I went to Suzhou from Beijing. My local friend advised me to get on a plane to Shanghai airport and take a taxi from there. They told me that the taxi fare from the airport Shanghai to Suzhou to be about 400 yuan.When I arrived at Shanghai airport, I saw a middle-aged man holding a placard, with "Suzhou , Wuxi "written on it. He wanted to charge 200 yuan for ride.That caught my attention! It was half the price I expected. I checked the man - he looked pretty decent and looks great. 

And so I accepted offer.The journeyThe people carrying my luggage in his car, has led me to the nearest place and asked me to wait. Five minutes later, he returned with another car and the other driver. He explained to me that he did not have a driver's license in Suzhou and asked his friend to say goodbye help.Before, I paid 200 yuan and confirmed with a new driver that he would take me to Suzhou. I move my luggage to the new trip car.During while chatting with the driver, I realize he was on his way back to Wuxi, Suzhou ago. Who "contracted" he paid his 50 yuan.His car stopped outside the city of Suzhou. He told me that he was not familiar with the streets of Suzhou and help me get a taxi.Within few minutes, he called a taxi, told the taxi where I want to go, pay 10 yuan taxi drivers and moved my luggage. The rest of the journey was uneventful and I arrived safely at my hotel, in time to meet me customers.All benefitThere three people in the value chain. First, the people at the airport are offered to meet my needs at half price. 

He makes money by Outsourcing "production" driver Wuxi, which can be done at a cheaper price. Second, the driver of Wuxi "Outsourcing" the taxi driver reason.At same Suzhou Eventually, the people at the airport who earned 150 yuan, while the drivers get 40 yuan Wuxi and Suzhou taxi driver earns 10 yuan. I was the biggest winner because I saved 200 yuan! The bottomline is the company should focus on what they are good, and maximize the ability of others'. But today, many companies are still trying to do all of their own in-house.For example, IT departments in large companies trying to develop an application available on the market - but non-core business. 

Many companies also they think that the cost of doing work is fixed, so it is better to work with existing resources rather than incur additional costs in IT application or services.They think that labor costs are only basic salary, and forget other costs like bonuses and employee benefits, as well as overhead such as recruitment and leasing. They underestimate their power cost.The fact unless you understand the true value of a particular process or project, it is difficult to decide whether Outsourcing is cost alternative.Besides better, the question is: Can you do a more better job than a human expert to the court? Think Wuxi and Suzhou taxi driver.