Premium Essay

Outsoursing

In: Business and Management

Submitted By flynnc1
Words 714
Pages 3
Outsourcing Paper Outsourcing has been defined in many ways. According to one definition, outsourcing is defined as, "... A practice used by different companies to reduce costs by transferring portions of work to outside suppliers rather than completing it internally" (Dictionary.com, 2010, para. 1). In this paper I will discuss the rationale and challenges of outsourcing business functions to low-cost countries or firms. Many reasons can be attributed to outsourcing problems but the primary reason is cost.
Rationale
A strong rationale for outsourcing “…is that organizations have one or more non-core business functions” (Belcourt, 2009, p. 1). Of course, cost savings is a primary reason for outsourcing business functions. For example, in situations involving payroll, studies show outsourcing payroll can result in savings ranging from 10 to 20% more than two years or longer. Outsourcing also is helpful when there is an irregular need for a particular service (Belcourt, 2009). Outsourcing can keep from acquiring a full-time employee. Since employers cannot always “pursue excellence in all areas, many will focus on core competencies, such as customer service or innovation, and outsource secondary functions, such as benefits administration. Studies show that companies that outsource report reducing administrative tasks by more than half and increasing their strategic focus by 40%” (Belcourt, 2009, p. 1). Another outsourcing driver is technology. This can help especially in areas in which it is difficult to find or retain technical talent. Human Resources service is another area that lends itself to outsourcing because of the process of repetition. “Outside specialists know employment legislation and workplace law better than anyone and can assure clients in which all their practices comply with legislation” (Belcourt, 2009, p. 2). Challenges Outsourcing…...

Similar Documents

Free Essay

Stress Management

...tension and boredom depending upon the nature of stress and the capacity of individuals to bear stress. * Behavioral problem: people show dysfunctional behavior because of stress of high level. Organization signifying:- As well as we know today’s modern life is full of stress. And in every organization mostly employees are suffering with stress. So, to know about the stress and their reason we have to take an organization. That is HCL BPO . HCL BPO is one of leading global IT services company which is providing software solution ,BPO services and remote infrastructure management. Its focused mostly on their R & D outsoursing which is working with their clients in their business core area. And it’s network in 15 countries having 26 offices which is working for banking, insurance, retail & consumer, aerospace, automatic, semiconductors, telecom and life sciences. And it’s revenue is US $ 864 million (RS 3890 crore) and 28182 employee. LITERATURE REVIEW:- Stress levels rising in India Inc: Survey | | | | Fifty-seven per cent of workers in the corporate sector in India reported an increase in stress over the last two years, a survey has said. Of over 11,000 corporate across 13 countries, 58 per cent companies worldwide experienced an appreciable rise in their workplace stress over the last two years, according to a survey by workplace......

Words: 4100 - Pages: 17

Premium Essay

Papar

...SCENARIO NO.3 59 SCENARIO NO.4 60 SCENARIO NO.5 60 SCENARIO NO.6 60 SCENARIO NO.7 61 SCENARIO NO.8 61 Competitors Objectives 62 Competitor's Current Strategy 63 Competitor's Resources and Capabilities 64 Competitor’s Assumptions 66 Regional Factors 67 Value chain activities: 68 Key competitive advantages: 72 Solutions: 82 Weights of Key success factors in five airlines: 86 COMPETITIVE ADVANTAGE 92 FIVE GENERIC COMPETITIVE STRATEGIES: 92 LOW COST PROVIDER STRATEGIES: 92 DIFFERENTIATION STRATEGIES: 95 BEST-COST PROVEDER STRATEGIES: 96 FOCUS (MARKET NICHE) STRATEGY: 96 STRATEGIC ALLIANCE AND PARTNERSHIP: 97 MERGER AND ACQUISITION STRATEGIES. 98 VERTICAL INTEGRATION. 98 OUTSOURSING. 98 OFFENSIVE AND DEFENSIVE STRATEGIES. 99 APPROPRIATE FUNCTIONAL AREA STRATEGIES. 100 THE IMPORTANCE OF LINKING STRATEGIES TO COMPANY VALUES AND ETHICAL STANDARDS. 100 FIRST MOVER ADVANTAGE AND DISADVANTAGES. 101 TWOS Matrix 102 Strength-Opportunity 102 Weakness-Opportunity 103 Weakness-Threat 104 Space Matrix 105 Financial Strength 106 Score 106 Average 106 Financial Strength + Environmental Stability = 4 – 1.67 = 2.33 109 Graphical presentation 110 Conclusion 110 Internal Factor Evaluation (IFE) Matrix 111 EFE MATRIX 115 QSPM 117 Why companies expand into foreign markets 120 1. To gain access to new customers 120 2. To achieve lower cost and......

Words: 28700 - Pages: 115

Premium Essay

Manufacturing Industry Analysis

...regulate the safety of the products as well as the welfare of employees, but the wage for manufacturers are still relatively low that may lower workers’ incentives to work hard and produce high qualities of products. In terms of echnology, an introduction of varieties of innovated tevhonology helps increase the productivities and lower the production costs. For economic factor, GDP, CPI,etc are all economic measurements to evalute the overall performanee of the indudtry from economic perspective. As more and more production costs and labor cost being reduced along the way of manufaturing, economic of scale, which accounts for a large portion of GDP, kcould be achineved as well as the efficiency of manufacturing. Finally, for global factor, outsoursing and globalized free trades have been a trends for most of the manufacturing companies. comapnies outsourced some uniportant activities to the third party, that ways, companies are able to focus on key activities and lower the cost otherwise occurs if manufacturing by themselves. however, this approach has brought threats as well in the sense that qulitiies and high standards might be sacrificed and companies may loss control over suppiers and as a result, negetively affect the business in the long run. Five-Forces Analysis Competitive Environment Force | Threat Analysis | What are companies in the industry doing about this threat? | Threat of New Entrants Overall threat level = | Most of the firms in the......

Words: 8727 - Pages: 35

Free Essay

Airtel

...Welfare Recruitment and Training * Excluding amortisation of Deferred ESOP Cost (Refer Note 19(vii) on Schedule 22) SCHEDULE : 17 SALES AND MARKETING EXPENDITURE Advertisement and Marketing Sales Commission and Content Cost Simcard Utilisation Others 6,391,535 13,672,192 2,680,001 5,153,079 27,896,807 7,156,469 7,243,797 1,811,107 8,262,426 24,473,799 15,661,540 698,118 665,822 508,891 17,534,371 15,145,612 642,923 746,386 488,020 17,022,941 962,676 3,775,193 2,680,001 715,087 483,866 858,915 1,142,295 3,895,304 1,811,107 1,265,279 962,676 998,537 Bharti Airtel Annual Report 2009-10 (Rs '000) Particulars SCHEDULE : 18 ADMINISTRATIVE AND OTHER EXPENDITURE Legal and Professional Rates and Taxes Power and Fuel IT and Call center Outsoursing Traveling and Conveyance Rent Repairs and Maintenance - Building - Others Insurance Bad debts written off Provision for doubtful debts and advances Provision for Diminution in Stock/ CWIP/Security Deposit Collection and Recovery expenses Loss on sale of assets (net) Miscellaneous expenses For the year ended March 31, 2010 For the year ended March 31, 2009 2,428,422 523,897 796,378 11,306,744 1,241,952 1,848,810 201,819 539,734 110,230 729,936 2,766,675 902,419 2,974,331 430,075 1,924,148 28,725,570 6,585,414 177,222 627,045 6,837,202 1,326,528 1,241,532 210,723 448,311 32,665 815,967 3,002,326 519,726 1,882,834 25,735 789,740 24,522,970 SCHEDULE : 19 OTHER INCOME Liabilities/ Provisions no longer required written back......

Words: 92085 - Pages: 369

Free Essay

Mattel

...productos, en particular los proveedores buscaban ahorrar costos de testeo de productos. Esto se explicaba principalmente en los márgenes tan estrechos que ganaban estas compañías, lo cual los hacia muy sensibles a los costos. Ademas factores como la revaluacion del Yuan, y alzas en los salarios en China, ejercían presión adicional sobre estas compañías. Otro factor que vale la pena resaltar es la falta de controles por parte de los entes reguladores, y en el caso Chino se pueden percibir una alta corrupción, asi como falta de objetividad por parte de los entes regionales para certificar la calidad de producción de sus compañías. En general no se puede decir que la principal causa del “recall” de productos por parte de Mattel se deba al outsoursing, sino a fallas en la implementación interna de un plan de calidad, que permita tener un mejor control sobre los procesos, y sobre toda su cadena de suministro. 4. ¿What should Mattel do in the future to avoid such problems described in the case? (34%) Existen varias medidas que puede implementar Mattel® para solucionar los problemas que se describen a lo largo del caso: 1. En primer lugar se debe pensar en mejorar el control sobre la extensa red de proveedores de la compañía, implementando un riguroso registro de las compañías a las cuales se les puede comprar materiales para la fabricación de los juguetes, de tal manera que se eviten problemas como el presentado con la presencia de pintura con plomo en los juguetes......

Words: 1546 - Pages: 7