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Literature Review and Project Specification - Essay Example
Finding the most cost-effective and efficient method of AD sourcing is a complex and monumental task. Many factors affect the cost of AD project sourcing, and there is a wide variety of sourcing options (such as on-site, off-site, offshore and "nearshore") from which to choose…
Most of them fail to examine how global sourcing integrates with and supports their broader sourcing strategy and business goals.
As organizations evaluate sourcing options, there are many models with no "one size fits all" choice. Although the delivery of outsourcing options is maturing (making outsourcing less risky and potentially less costly), making an informed strategic sourcing decision is still complex. It requires a thorough qualitative analysis and a quantitative financial analysis (business case) of all the possible sourcing options. A balance between the two needs to be the foundation for the final sourcing decision. For the purpose of this research, I will concentrate on the quantitative analysis.
The justification for outsourcing therefore looks very straight forward and in the early days the process was thorough and well thought through. By contracting out services to a third party, organisations could reduce their operating costs and refocus their efforts and remaining resources on their core competencies. And this is still true today, the two main reasons for outsourcing attested to by a number of scholars are 1. Improve Company focus, 2. Reduce and control operating costs (Mylot, 1995; Field, 1998; Greaver, 1999; Barthelemy, .2001). ...