6. Outsourcing is the process of contracting out a business
process, which an organisation may have previously
performed internally or which the company deems
necessary or important, to an independent organization,
where the process is purchased as a service.
The opposite of outsourcing is called insourcing, and is
sometimes accomplished via vertical integration. However,
a business can provide a contract service to another
business without necessarily insourcing that business
process
7.
8. Without question, outsourcing has fundamentally
changed the global business
landscape. Not long ago, outsourcing was simply
viewed as a means to reduce
various operational costs. However, as competition
increases and budgets
wear thin, wise organizations are turning to
outsourcing to add value beyond
lowering costs
9.
10.
11. Reduce and Control Operating Costs - The single most important tactical reason for
outsourcing is to
reduce and control operating costs. Access to the outside provider’s lower cost
structure, which may be the
result of a greater economy of scale or some other advantage based on
specialization, is clearly and simply
one of the most compelling tactical reasons for outsourcing.
Additionally, companies that try to do everything themselves may incur vastly
higher research, development,
marketing and deployment expenses -- expenses that have to be passed onto the
customer or taken off the
bottomline. Today’s customers are too sophisticated to accept the cost representative
with an organization’s
attempt to maintain singular control over all its resources
12.
13.
14.
15. There are basically two methods to outsource things to a better
company that can do as we want even better than us. They are,
• Outsourcing projects to companies.
• Hiring manpower from companies and execute your projects.
Both these methods have it’s own advantages and disadvantages.
But it depends on your requirement to choose one among those. For
example, if you are in need of software that can maintain your
business operation, it is better to outsource the project to some
company and ask them the end result. If you have some e-commerce
site to maintain and to do customer support, it is better to hire
professionals on those areas and make them work under your control
as it needs your control more than in the first one.
16.
17.
18. Outsourcing has generated much controversy in recent times for various reasons.
Outsourcing has been resorted to with mainly for maximizing profits. Before
deciding on outsourcing, the outsourcer should examine in detail the various
problems that are likely to crop up. Some of the problems can be easily straightened,
while others can result in the outsourcer finding itself in a no-way out situation.
.
Chance to nurture in-house talent is lost:
The employees of the outsourcer are deprived of an opportunity to develop skills and
experiences with respect to the task that is being outsourced.
Loss of Managerial Controls:
The service provider is a separately managed entity .The contract between the
service provider and the client may overlook certain factors, which could result in a
total mismatch of policies of both parties. It may be much easier for the client to get
the job done by its own employees rather than someone else over whom he has no
control.
