Various functions of the business can be outsourced. The function which are most popular in outsourcing are IT functions, customer care, human resource, financial functions, marketing function etc. Nike the famous sports accessories company had outsourced the work of manufacturing shoes to countries like India and China as this will reduce the cost is an example of outsourcing. Off shoring is also a type of outsourcing. When a company outsources its work to other companies which are situated in different countries is known as off shoring. The main off shoring companies are Price Waterhouse Coopers, HSBC, TCS, Wipro, IBM, Capgemini, Genpact etc. the various type of outsourcing are business process outsourcing, knowledge process outsourcing, finance and accounting outsourcing, legal process outsourcing, human resource process outsourcing etc. Outsourcing has resulted in increase in the number of employment. The process of outsourcing mainly consists of four stages they are 1) identifying whether outsourcing is required by the company 2) identifying and selecting the activities which can be outsourced 3) developing the contract 4) delegating the authority to the service provider so that the working can be smooth. The contract contains mainly three things they are the price at which the service will be provided, the legal terms and condition and the service level agreement. Outsourcing can be done by function, region and industry. 2. Growing Importance of Outsourcing With every passing day outsourcing is becoming popular. As per a study conducted by Capgemini more than 70% of executives think that in today’s competitive world outsourcing is important for survival. About 70% executives feel that savings made by outsourcing can be used for growth and 60% feel that flexibility can be achieved through outsourcing. Companies in manufacturing sectors prefer outsourcing more than the companies in service sector. The decisions of outsourcing are taken after assessing the profitability and companies, ability to grow. Companies who do outsourcing can invest their savings for future growth and innovation. Thus these companies are in better position than the companies who do not do outsourcing as they can save less than the former ones (Brady, 2011). Outsourcing helps the company not only to save money but also to achieve expert service. The firms who do the outsourced work have the human resource who are specialised to do that particular work. In this way the company can utilise expert skill that to without making any capital investment. Thus through outsourcing companies achieve reduction in cost as well as quality service. This is the main reason of growing popularity of outsourcing. Outsourcing is becoming a major business activity which has the potential of becoming an industry. In figure 1 we can see the growth of outsourcing in different sectors. As per the figure about 61% of outsourcing is done in software development, 58% in website and e- commerce, 55% in hosted application, 53% in disaster recovery service and 32% in data centre operations. The use of outsourcing has been increased most in software development organisations. There is almost 14% increase in outsourcing in website and e-commerce sector. The second largest increase in outsourcing is in hosted applications sector. In help desk activities there is no decrease in outsourcing. Thus one can find that every sector is involved in outsourcing. The activities outsourced ranges from
Outsourcing has become a major business in today’s world.Most of the big companies outsource their work which is not their core operation. To understand outsourcing one has to know what does outsourcing means…
The realm of strategic management aids in specifying an organisation’s mission, vision as well as objectives and in creating various policies and plans that are often in terms of programs and projects. These programs and projects are designed to meet objectives and need a commitment of resources on the part of the management.
This paper begins by defining outsourcing and then describing the different forms of outsourcing. Next it outlines why organizations opt to outsource and how they select what to or not to outsource. The paper then dwells on the advantages and disadvantages of outsourcing from two perspectives: from the point of view of a company and from the point of view of the country.
Outsourcing and offshore outsourcing have increased to great extents but it has been also found out that there are certain risks and negative externalities attached with outsourcing. The paper through discussion of the benefits and disadvantages will exhibit evidences to show whether the advantages of outsourcing outweigh its disadvantages.
The opposite of outsourcing is Insourcing. In short, outsourcing is the process of delegating a work to an organization in a foreign country whereas insourcing is the process of delegating the work to another company in the same country itself. Outsourcing and Insourcing are some of the major business strategies adopted by the IT organizations.
Outsourcing basically involves contracting out non-core business functions to a provider external to an organization. In other words, when two organizations enter into an outsourcing agreement, one agrees to exchange a certain service or set of services for payment by the other.
be outsourced and the advantages and disadvantages of IT/IS outsourcing to the outsourcing organization. With the help of a real life example of the use of IT/IS outsourcing (i.e. an outsourcing contract) this paper will critically analyze the advantage and disadvantage of IT/IS outsourcing and various factors associated with it.
The author provides a brief review of various types of Outsourcing Management Strategies like Selective Outsourcing, Value Added Outsourcing, and Cooperative Outsourcing. Then he gives a brief description of the advantages and disadvantages of Outsourcing Management. Impacts at the Macro and Micro Level are also given in the discussion.
to Strain (2012), the factors that could evidently justify outsourcing would include the following: lower costs, skilled workforce, security, and delegation of some form of control. The most justified rationale for outsourcing work overseas is the potential savings that could
This is due to low production and supply of the food items with rich nutritional content. Indeed, Darden restaurant Company that became operational in 1967 has recorded great excellence. It was initiated with a core mission to become the global