Business Outsourcing Samples for Students †MyAssignmenthelp.com

Question: Discuss about the Business Outsourcing with the Advantages and Disadvantages. Answer: Introduction Outsourcing is considered being the business strategic aspect that assists in moving the functional aspects, methods, activities as well as decisions of a company having the accountability from within a company to external providers. This occurs through the negotiation of contract agreements with a vendor taking the responsibility in respect of the method of production, management of people, quality, customer service as well as major asset management regarding the functional aspects. There exist different reasons for an organization in choosing the aspect of outsourcing specific functions of business. Certain common reasons take into consideration the aspect to reduce as well as control the operating costs. Also, to improve the focus of the organization, gain access to capabilities that are considered being world class, to free internal resources in respect of other purposes, to streamline or increase effectiveness in respect of functions that are time-consuming. Moreover, to do the maximization regarding the utilization of external resources as well as to share risks with a partner organization. Varied industries are outsourcing various aspects regarding their businesses, but certain basic operational functions that are getting outsourced includes human resources, information technology, accounting as well as payroll processing, facility management, manufacturing, fulfilment of orders, customer call centres, marketing research as well as legal aspects Business Outsourcing A Brief Study Business Outsourcing is considered to be the aspect of allocating particular business processes to a specialist external provider of services. In majority of the times, a company is not able to do the handling of every aspect regarding a business process internally. In addition, certain methods are temporary and the company is not intending to hire in-house experts for performing the tasks. After outsourcing the task to the service provider, the individual will be accountable to carry out the tasks as well as maintain the assets of the company. Moreover, business outsourcing can be explained as the strategic utilization of outside resources for performing activities that were traditionally handled by internal employees as well as resources (Hair 2015). Outsourcing is considered being a strategic aspect that will assist a company in contracting out main functional aspects to the providers of services that are considered being specialized as well as well as effective. These service pro viders finally become valued business partners. In certain cases, outsourcing is having the involvement of transferring staffs from an organization to the outsourcing organization (Becker 2013). Outsourcing is considered being the business strategic aspect that assists in moving the functional aspects, methods, activities as well as decisions of a company having the accountability from within a company to external providers. This occurs through the negotiation of contract agreements with a vendor taking the responsibility in respect of the method of production, management of people, quality, customer service as well as major asset management regarding the functional aspects. The method will be significantly reducing the fixed organizational overhead expenses (Lacity 2014). Reason for the companies to do outsourcing There exist different reasons for an organization in choosing the aspect of outsourcing specific functions of business. Certain common reasons take into consideration the aspect to reduce as well as control the operating costs. Also, to improve the focus of the organization, gain access to capabilities that are considered being world class, to free internal resources in respect of other purposes, to streamline or increase effectiveness in respect of functions that are time-consuming (Cavusgil 2014). Moreover, to do the maximization regarding the utilization of external resources as well as to share risks with a partner organization. Also, the major factors that have led to the rising trend of outsourcing are having the absence of expert-labour in certain areas of the business method, having the presence of cheaper labour, while not compromising on the output quality as well as having the capability as well as feasibility for focusing on the other essential processes of business. These factors, in a specific manner made the contribution to majority of the outsourced partners in various locations throughout the world (Schniederjans 2015). The aspect of outsourcing assists in allowing the companies towards focusing on their core business as well as creating a competitive advantage through the reduction of the functional costs. The best aspect of outsourcing is that the overall functional aspect of an organization or simply a part of it can get outsourced. For instance, an organization can be outsourcing the network management oversight regarding an IT process whereas maintaining internal end-user assistance (Cavusgil 2013). This will be providing the company with a proper balance of on-site staff assistance. Companies are using the aspect of outsourcing as a strategic endeavour for improving the service to the customers, quality as well as cost reduction. Outsourcing can be considered being a permanent or temporary agreement for bridging the gap regarding staffing, for learning effective techniques or improving the flawed product design. When a company tries to look for opportunities relating to outsourcing, it is requ ired observing the potential areas as well as every element within that area for making the determination whether a part or the overall functional aspect is required getting outsourced (Chou 2015). Varied industries are outsourcing various aspects regarding their businesses, but certain basic operational functions that are getting outsourced includes human resources, information technology, accounting as well as payroll processing, facility management, manufacturing, fulfilment of orders, customer call centres, marketing research as well as legal aspects. Requirements for successful outsourcing In the earlier times, cost or reductions of headcount were considered being the most basic outsourcing reasons. In the current scenario, the drivers are mostly considered having more strategic aspects and are focusing on the aspect to carry out value-adding activities internally where a company can do the optimum utilization of its individual core proficiencies. The most essential areas in respect of a successful outsourcing program take into consideration the clarity that is concerned with the goals and objectives of an organization. Also, a strategic vision as well as plan, the selection of vendor, the aspect of relationship management and subcontract as well as vendor agreements that are structured in a proper manner. Moreover, having open communication that will be affecting the stakeholders, senior leadership assistance as well as involvement, attending personal matters very carefully and also short period financial justifications (Wuyts 2015). Open Communication Open communication as well as executive assistance are specifically significant regarding an outsourcing process that is considered being successful. Additional consideration is required regarding a functioning Service Level Agreement (SLA) that is having an open availability for every employee that is having an involvement. Irrespective of the result of the arrangement regarding outsourcing, the management of change is considered to be the basic aspect regarding a programs success. To do the assessment of the requirement of the stakeholders is considered being the primary aspect of this method, as well as to have open communication channels in this period is considered to be essential. Every concerned individual should be having an involvement in this method (Lacity 2013). Executive Assistance Strategic goals, like outsourcing plans should definitely be coming from the top organizational level. There is the requirement for the senior management in articulating the goals as well as objectives regarding the outsourcing endeavour as well as communicating in which way the method will be benefitting a company. In the current scenario, the managers are looking forward and trying to recognize the responsibilities to ensure that the success of the companys outsourcing endeavours should not come to a halt when the contract is on the verge of getting ended (Markus 2015). Advantages and Disadvantages of Outsourcing Business Functions Advantages of Outsourcing Cost Savings There can occur major cost savings when the outsourcing of business function occurs. Costs regarding staff compensation, expenses regarding office space as well as other expenses related with the aspect of offering a space for work or setups regarding manufacturing are discarded and resources are freed up in respect of various purposes. Focusing on Core Business Outsourcing assists the companies for focusing on their proficiency as well as core business. When companies are going outside their proficiencies, they will be getting into the functional aspects of business as well as methods about which they might not be having the appropriate knowledge. For instance, when a grocery store makes the decision of adding a florist to their functional aspect, there might occur a situation in which providing too much concentration on the florist part of the business might be resulting in the organization losing focus of their actual business of grocery (Vaidhyanathan 2013). Better Quality There will occur the actualization of better quality by vendors having more proficiency as well as increased specialized methods. Customer Satisfaction The beneficial aspect of having a vendor contract is that they are bound to specific levels relating to service as well as quality. Functional Effectiveness Outsourcing assists a company in getting exposure to vendor specialized methods. Specialization assists in providing more effectiveness that assists in allowing a quicker turnaround time as well as increased quality standards (Lacity 2014). Risk Sharing The aspect of outsourcing specific elements of a business process assists a company in shifting specific responsibilities to the outsourced vendor. Since, the outsourced vendor is considered being an expert, they will assist in effective mitigation of the risk factors. Reduced Operational as well as Recruitment Expenses Outsourcing assists in eluding the requirements for hiring staffs internally, as a result there occur the minimization of recruitment as well as operational expenses in a significant manner (Gerbl 2015). Disadvantages of Outsourcing Risk of exposing confidential data When a company does the outsourcing of HR, Payroll as well as services regarding Recruitment, there is the involvement of risk that is associated with the exposure of confidential information of the organization to a 3rd party. Synchronizing the deliverables When the correct partner is not being chosen in respect of outsourcing, there occurs certain areas of problem that takes into consideration stretched delivery time frames, quality output that is of low standard as well as unsuitable categorization of accountabilities. Sometimes, it is more easy in regulating these factors within a company in comparison to an outsourced partner (McIvor 2016). Hidden expenses Even though, in majority of times outsourcing is considered being cost efficient, but in certain times there is the involvement of hidden expenses that is associated with the signing of a contract. Moreover, signing a contract across global boundaries might be posing a major threat. Quality Risk Due to outsourcing, there can occur the aspect of exposing a company to probable threats as well as legal exposure. Barriers regarding language When the outsourcing of a customer call centre is done to a country that is speaking a different language, there might occur dissatisfaction levels in respect of customers to deal with the barriers of language of an individual having a strong accent (Lacity 2015). Organizational Information An outsourced staff might not be having similar understanding as well as passion in respect of a company as a regular staff. There might occur the situation when an outsourced staff will be coming in contact with the customers and will be not having sufficient knowledge regarding the company that will result in having a negative experience in respect of the customers. Conclusion To conclude it can be stated that, business outsourcing is having both advantages as well as disadvantages. Outsourcing assists the companies for focusing on their proficiency as well as core business. When companies are going outside their proficiencies, they will be getting into the functional aspects of business as well as methods about which they might not be having the appropriate knowledge. For instance, when a grocery store makes the decision of adding a florist to their functional aspect, there might occur a situation in which providing too much concentration on the florist part of the business might be resulting in the organization losing focus of their actual business of grocery. When the correct partner is not being chosen in respect of outsourcing, there occurs certain areas of problem that takes into consideration stretched delivery time frames, quality output that is of low standard as well as unsuitable categorization of accountabilities. When the correct partner is no t being chosen in respect of outsourcing, there occurs certain areas of problem that takes into consideration stretched delivery time frames, quality output that is of low standard as well as unsuitable categorization of accountabilities. Sometimes, it is more easy in regulating these factors within a company in comparison to an outsourced partner. References Becker, J., Kugeler, M. and Rosemann, M. eds., 2013.Process management: a guide for the design of business processes. Springer Science Business Media. Cavusgil, S.T., Knight, G., Riesenberger, J.R., Rammal, H.G. and Rose, E.L., 2014.International business. Pearson Australia. Cavusgil, S.T., Knight, G.A. and Riesenberger, J.R., 2013.A framework for international business. Pearson. Chou, S.W., Techatassanasoontorn, A.A. and Hung, I.H., 2015. Understanding commitment in business process outsourcing relationships.Information Management,52(1), pp.30-43. 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