StudentShare
Contact Us
Sign In / Sign Up for FREE
Search
Go to advanced search...
Free

Outsourcing is here to Stay - Essay Example

Cite this document
Summary
 This essay 'Outsourcing is here to stay' intends to highlight what is meant by outsourcing, why do we need to outsource, different types of outsourcing and issues concerned in outsourcing. It involves the transfer of management or day to day execution of an entire business function. …
Download full paper File format: .doc, available for editing
GRAB THE BEST PAPER93.3% of users find it useful
Outsourcing is here to Stay
Read Text Preview

Extract of sample "Outsourcing is here to Stay"

Outsourcing is here to Stay Outsourcing has been a part of business lexicon since 1980s. Outsourcing which is very common in today’s world normally refers to subcontracting a work which is mainly carried out to reduce the time, energy and cost incurred by a company or organization which is a third party, who intends to carry out a task. It involves transfer of management or day to day execution of an entire business function to an external service provider. Terms like off- shoring, near shoring, no shoring is normally used along with outsourcing.1 These terms are all subsets of outsourcing. Off-shoring refers to the task which is assigned to a third party based in another country away from the country who intends to carry out the work. With increase in globalization and the amount of task being outsourced, the difference between outsourcing and off-shoring is hardly felt. Counties like India and China have been two hotspots for carrying out outsourcing task. Central and Eastern Europe are attractive destinations, but costs are rising there, too. Offshoring is actually increasing in Africa and the Middle East, but political instability poses ongoing challenges there. With obstacles persisting in the field of outsourcing, the essay ‘Outsourcing is here to stay’ intends to highlight what is meant by outsourcing, why do we need to outsource, different types of outsourcing and issues concerned in outsourcing. The section on ‘types of outsourcing’ will have three subheads to have a better understanding. WHY DO WE NEED TO OUTSOURCE? The need for outsourcing a task varies based on the need. It could include one or more reasons mentioned below namely: lower costs (due to economies of scale or lower labor rates) variable capacity the ability to focus on core competencies by ridding yourself of peripheral ones lack of in-house resources getting work done more efficiently or effectively increased flexibility to meet changing business and commercial conditions tighter control of budget through predictable costs lower ongoing investment in internal infrastructure access to innovation and thought leadership 2 TYPES OF OUTSOURCING In our day to day use we get to hear different abbreviations like BPO, ITO and KPO. But what do they actually mean and where lies the difference? We need to look into the details of each and try to know the difference between these three different types of outsourcing. a. Business Processing Outsourcing (BPO) – it refers to outsourcing a specific business processing task. It can again be divided into two categories namely front office outsourcing and back office outsourcing. Front office outsourcing includes customer related services like marketing, technical support etc and back office support refers to services like billing or purchasing. b. Information Processing Outsourcing (ITO) - To impart information, information processing outsourcing too is being carried out both for front and back office support. c. Knowledge Processing Outsourcing (KPO) - Similar to ITO, we have the knowledge processing outsourcing units known as KPOs who by and large are knowledge based units who provide analytical, technical and have decision making skills. Pharmaceutical Research & Development units mainly fall under this category. ISSUES AND CONCERNS OF OUTSOURCING Even though outsourcing has been a very common concept in today’s world mainly for the developing countries like India, but there are a large number of issues pertaining to this sector. Many BPOs, ITO and KPOs have not been able to succeed in today’s world because of a huge competition. The clients who have been able to deliver quality resource have been able to succeed. Thus, there is a need to have quality assurance and quality check to successfully carry out the task. The other problem that one can foresee is the conflict that arises between the client and the vendor. The client intends to get better service, often at lower costs, than it would get by doing the work themselves. The vendor, however, wants to make a profit. That tension must be managed closely in order to ensure a successful outcome for both client and vendor. What is the best duration for outsourcing a task has always been of major concern. In the initial days out outsourcing, the contracts were of longer duration almost reaching 10 years. But then gradually they were shortened as there were more vendors available at cheaper cost that would provide better services. Truly speaking, the duration of the contract depends mainly on the type of work that needs to be carried out. Selection of a service provider who is capable enough to carry out the assignment is the most difficult task. One needs to be very sure on the type of task that needs to be carried out and whether the vendor that the client intends to hire has the potential or not. If the client is not sure whether to have a contract with that vendor then a second opinion is a must for successful completion of the task. There has been lot of debate on the loss of local jobs due to consolidation, improving efficiencies and lowering costs.3This issues need to be readily tackled if to avoid crisis at the political and economical level. CONCLUSION Looking at the large number of problems faced, there is a need to resolve the problems. Each client has to have a clear cut guideline which should clearly spell out the need for outsourcing. There is a need develop co-sourcing alliance which would mean that the project is handled both by the vendor and the client. Whatever the type of outsourcing, the relationship will succeed only if the vendor and the client achieve expected benefits. Work Cited Babu, M (2005) http://www.computerworld.com/managementtopics/outsourcing/story/0,10801,105828,00.html?SKC=management-105828 Accessed on 23rd March, 09. Manning et al (2008) A Dynamic Perspective on Next-Generation Offshoring: The Global Sourcing of Science and Engineering Talent Academy of Management Perspectives 22.3: 35-54. Overby, S (2007), http://www.cio.com/article/40380/ABC_An_Introduction_to_Outsourcing?page=1 Petal, M Disaster Prevention for Schools: Guidance for Education Sector Decision-Makers Consultation version. UNISDR, Geneva November 2008 Print. Sharma, S and Dey, Balaka Towards a Safer India: Education in Disaster Management, Central Board for Secondary Education, Delhi 2005 Print. Read More
Cite this document
  • APA
  • MLA
  • CHICAGO
(“Outsourcing is here to Stay Essay Example | Topics and Well Written Essays - 1000 words”, n.d.)
Outsourcing is here to Stay Essay Example | Topics and Well Written Essays - 1000 words. Retrieved from https://studentshare.org/business/1534390-outsourcing-college-essay
(Outsourcing Is Here to Stay Essay Example | Topics and Well Written Essays - 1000 Words)
Outsourcing Is Here to Stay Essay Example | Topics and Well Written Essays - 1000 Words. https://studentshare.org/business/1534390-outsourcing-college-essay.
“Outsourcing Is Here to Stay Essay Example | Topics and Well Written Essays - 1000 Words”, n.d. https://studentshare.org/business/1534390-outsourcing-college-essay.
  • Cited: 0 times

CHECK THESE SAMPLES OF Outsourcing is here to Stay

Ethical Consideration of Outsourcing

outsourcing is still a viable option and it is important to provide alternative job opportunities to displaced workers.... outsourcing and contracting are not new trends and those who feel that it is just a short-lived management fad are clearly in denial.... hellip; outsourcing has taken over a more aggressive role in today's competitive environment where no one wants to be the jack of all trades and master of none.... This is where outsourcing steps in....
7 Pages (1750 words) Essay

Contemportary Developments in Management

Based on various theories and business models, studies suggest that offshore outsourcing is preferred to domestic outsourcing or vertical integration of the firm.... outsourcing takes place across different departments fueled by efficient services at cheaper rates and quality performance.... Global integration provides further reasons for outsourcing like thicker markets due to combining of economies....
10 Pages (2500 words) Essay

International Business

Economic globalization, namely the spread of neoliberalism and capitalist-inspired consumerism as the dominant engine of economic growth, has both… The world is becoming more and more interdependent and whether you think globalization is a good or bad thing, it is here to stay.... outsourcing is an integral component of the globalization phenomenon and a key aspect of the global division of labour.... outsourcing, meaning the subcontracting of employment to other countries, is an increasingly common phenomenon with global As the jobs of the first world make their way to the developing regions of the third world, the forces of globalization have had many unintended consequences....
12 Pages (3000 words) Essay

ABB OUTSOURCING TO IBM

outsourcing is not confined to a county's borders; many organizations are seeking outsourcing… This kind of outsourcing has played a big role in the process of multinationalization.... The outsourcing industry has been there for a very long time, but it started gaining momentum in the early 1990s.... There are quite a number of reasons for outsourcing. Companies outsource their services in order to cut the cost of production.... outsourcing can be defined Most of the tasks that are outsourced are considered to be core to the business....
12 Pages (3000 words) Essay

The Demystification of Outsourcing

The paper 'The Demystification of outsourcing' focuses on globalization which is an international phenomenon with far-reaching consequences in the social, political and economic realms.... outsourcing, meaning the subcontracting of employment to other countries, is an increasingly common phenomenon.... This proposal will explore the globalization phenomenon with an eye to outsourcing and the changes dynamics of the global economic community.... Critical success factorsCritical success factors include access to the latest research on the subject of international IT outsourcing and the availability of data in the field....
1 Pages (250 words) Essay

Outsourcing Is the American Way

In the report “outsourcing is the American Way” the author discusses the issue of outsourcing in the USA.... nbsp;outsourcing is truly the issue, and 2) how we might be able to create jobs in America since outsourcing is a way to get cheap labor to significantly reduce a company's overhead.... “In spite of what is said in much of the press, the greatest beneficiary of outsourcing is the U.... Since India already has expanded its WiFi networks to accommodate several workers at cheaper prices, this actually keeps the production costs of products low because the customer support can be cheaply outsourced, thus giving companies more opportunities to invest their revenue elsewhere which can significantly increase their profit—and in turn, benefit employees and vested interests here in the U....
5 Pages (1250 words) Coursework

Wal-Mart Effect by Charles Fishman

Wal-Mart dictates the terms, and those suppliers that wish to stay in the game, comply with the mandates (Martin Vander Weyer, 2006).... Wal-Mart is a power in America's financial life to a far extra important degree than its adjacent British equal, Tesco, over here (Pallabi Gogoi, 2007)....
6 Pages (1500 words) Essay

Outsourcing of Production

According to this research paper, outsourcing or offshoring of production and employment refers to the practice of shifting jobs to other areas, more specifically to lower wage countries.... nbsp;This type of outsourcing or offshoring and the love of companies towards it comes as no surprise.... A study revealed in the first quarter of 2010 indicates that more than 80 percent of the US enterprises either are planning to increase their IT outsourcing or would like to keep it at least the same in future (Organisation for Economic Co-operation and Development, 2010)....
9 Pages (2250 words) Research Paper
sponsored ads
We use cookies to create the best experience for you. Keep on browsing if you are OK with that, or find out how to manage cookies.
Contact Us