The financial crisis has been spreading across the globe. Companies have been using their best strategy to survive and stay off the competition. With the expenses and costs on the rise and growing pressure from competition to keep the prices low, companies believe that outsourcing is the only viable option. In this project the author will be discussing and analyzing the concept of outsourcing. Firstly, author will deepen his knowledge by understanding the concept of outsourcing, its history and the changes that have been identified in outsourcing. Following which, we will be discussing and critically analyzing the benefits and risks or advantages and disadvantages or Pros and Cons of Outsourcing. This will help us to get a balanced view of outsourcing in order to decide whether outsourcing should be considered by growing companies or not. Lastly, we have also discussed about the different functions that are outsourced and that can be outsourced. Thus this project is basically a sum up of all the key highlight of outsourcing including, the benefits and risks, business functions outsourced and the trends in outsourcing.
[...] Heathfield, Outsourcing: Why and What) The results of the survey states that of the HR professionals believes that administration and Employee assistance is outsourced majorly. Author of this project have also discussed about the future of Outsourcing. Future outsourcing trends worldwide Outsourcing expenditure will continue to rise. More countries will find outsourcing attractive, creating a multi-polar world. Following the lead of the US and UK, the European Union markets will expand their offshoring programs, while Japan will increasingly look to China for its needs. [...]
[...] (James Bucki, Outsourcing: What it is and What it can do for you) The reasons of outsourcing can be myriad and different from country to country, company to company. Management or Companies taking the decision to outsource a particular business function can have various reasons. At the end all companies want their result to cut cost drastically, improve performance and gain competitive advantage. Few common reasons noted by the author of the project are: Limited Resources: one of the very common reason why management of a company decides to outsource is because of limited resources. [...]
[...] They can improve the quality of service and improve performance overall Save Big One of the biggest or major advantages of outsourcing is that company can save cost to a major extent. Services or labor or raw material that are costly in one country can be cheaper in other countries, outsourcing those services to such countries can help you cut cost drastically. The reduction in cost will in turn lead to higher savings which companies can use wisely like R & Investment, and Acquisitions etc. [...]
[...] Similarly, author of this project has briefed about the benefits and advantages about Outsourcing. To get a complete understanding of the term and use of outsourcing, author of this project would also like to list few risks and disadvantages associated with Outsourcing. Few key disadvantages associated with Outsourcing are: Less Control: Once a company decides to outsource a specific business function to a third party company. Company has less control over the decisions and the style of working. Another major problem is the culture of the third party company can create a major obstacle in the getting the work done. [...]
[...] With so many benefits and advantages of outsourcing, it becomes important to also identify the risks and disadvantages associated with Outsourcing. Company loses its control over the outsourced business operation and the resources related with the same. The percentage of risk has been increased due to information and security sharing with a third party organization. Quality of the product or services can be hampered due to outsourcing. Company relies on the third party organization financial well being in order to provide an undisrupted product or service. [...]
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