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Pages 3 (753 words)
Artemis sports wear (ASW) is the company, which is facing the problem of stagnation in its net revenues and shareholders value despite increase in its sales volume. This happens due to the fact that operational cost of the company is increasing. Now ASW wants to outsource it's IT, Billing, Customer services and HR processes, which will take place over a 5-year period.
Basically outsourcing means that products and operations are conducted to outside vendors that have expertise in a particular area. The aim may be to reduce costs by saving on personnel benefits, reduce personnel, or to be able to reassign employees to other tasks that are more important. It enables firms to focus on its core competencies and let outside firms do what these firms can do best. Outsourcing has become cost cutting approach to several firms yet it sometimes does not meet its expectations. Consultants often promise 20-40% savings but the average savings are about 9% (Byrne, 1996). Companies like Apple computer Inc. has outsourced its system and network engineering, telecommunications and help-desk services to Canadian firm. GM, Chrysler, Proctor & Gamble and lots of companies are outsourcing their operational processes to Latin America, china, India and other emerging nations. ASW is thinking of long-term growth and augment value to shareholders. So it has to develop long-term relationship to its service providers who are now present globally. By outsourcing IT services of Global service provider results in cutting cost considerably. ...
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