Downsizing Methods

Downsizing is a major part of, indeed one purpose of, nearly all outsourcing programs. Cost reduction is an objective of most outsourcing, and that reduction is primarily in terms of fewer employees.

But there are a variety of ways that downsizing can be accomplished without outsourcing. One currently popular approach is reengineering, which consists of methodically examining the operating processes of an organization by analyzing the types and numbers of employees needed for each function as well as developing better approaches for performing these processes. Another downsizing method is to make "across the board" cuts, say 10 percent of each department; this approach, which is used to hastily meet a budget crisis, is generally not recommended as it usually makes cuts in the wrong places.

In the data processing arena, many companies have been able to reduce staff by converting mainframe systems to client/servers, by adopting CASE methods for programming, and other methods for accomplishing the work goals with fewer employees.

Understanding Outsourcing

Understanding Outsourcing

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