There may be facilities for the parent company to overview the progress going on in the outsourced work. It may be either on-site or off-site. Everything should go in accordance with the conditions of the contract signed between both the parties and each of them can bring to the notice of the other if any negligence or wrongdoings occur from any corner. This actually helps to assure and retain quality all through the functioning of outsourcing.
Outsourcing refers to delegating back end functions that are necessary to run an establishment but are not a part of the core business. If we observe the market the trends in outsourcing could be understood clearly. It grows in bad times because companies want to reduce expenses. It grows in good times because companies want to grow. With the concentration on core business capabilities, many companies are outsourcing certain functions to experts. Outsourcing is done in areas like engineering, finance, health, accounting, human resources, etc. Anyway, a company goes for outsourcing means nothing but it is in the path of growth.
Advantages: 1) Help cost reduction. ...
Large multinational companies are investing in captive BPO units in supplier countries in multiple locations, to reduce risk and control quality. Robert Klepper and Wendell Jones points out that those who take decision should keep in mind so many things in mind. The basic fact is that managers responsible to decide on outsourcing are responsible to explain the advantages the organization is going to make. Besides, the doubts and suspicions that may naturally arise in the minds of stakeholders, suppliers, customers as well as staff could be cleared.
According to Mr. Shiva Ramani (as cited http://www.thesspa.com/sspanews/June07/article6.asp) expects the following from stakeholders:"1. Perform a Thorough Self-Analysis2. Look at Strategic Benefits, Not Just Business 3. Skill Availability & Management4)Project Management & Un-interrupted Communication5).Quality Commitment"
So many merits may be pointed out on outsourcing. The first and foremost positive thing is that the parent company will get more time to concentrate on strategically important subjects rather than getting hooked up around the day-to-day hassles of specialized jobs. Then comes the availability of top-notch resources. This can be made use of the company as and when required. Outsourcing helps to bring down operational costs by a considerable margin and this is being counted as one of the most striking advantages of outsourcing.
Now comes the negative sides of outsourcing. It is feared that outsourcing results in quality failure in general. Also security will be at risk. The fear is not exaggeration in all cases. Some experts even point out that the economic security of each country involved may be affected.
Coming to risk in outsourcing. No doubt, if the contract is not between two