outsourcing

Examples of outsourcing in the following topics:

• Outsourcing

  • The jobs being outsourced in an organization do not necessarily have to be outsourced to another country.
  • Outsourcing is typically done by organizations who outsource non-core processes that are inefficient, difficult to manage, or too costly.
  • Choosing a supplier to meet an organization's outsourcing needs depends on the business process being outsourced, the scope of the project to be outsourced, as well as geographic factors.
  • An organization needs to outline the benefits and risks of outsourcing when deciding whether to outsource.
  • Uncertainty in outsourcing occurs when an organization is not sure which business process function to outsource.

• Outsourcing

  • An outsourcing deal may also involve transfer of the employees and assets involved to the outsourcing business partner.
  • Companies outsource to avoid certain types of costs.
  • Perceived or actual gross margin in the short run incentivizes a company to outsource.
  • This motivates companies to outsource for lower labor costs.
  • Lower regulatory costs are an addition to companies saving money when outsourcing.

• Outsourcing

  • Outsourcing is the contracting of an existing business process to an external, independent organization.
  • In the early 21st century, businesses increasingly outsourced to suppliers outside their own country, sometimes referred to as offshoring or offshore outsourcing.
  • Companies abandoned vertical integration, sold off non-core operations, and outsourced those functions to other companies.
  • Outsourcing involves not only the procurement of materials and components, but also the outsourcing of services that traditionally have been provided in-house.
  • The logic of this trend is that the company will increasingly focus on those activities in the value chain where it has a distinctive advantage, and outsource everything else.

• Potential external relationship obstacles

  • Outsourcing offers a number of potential benefits for companies; however they cannot ignore the obstacles that come along with outsourcing.
  • Some countries have not achieved the desired benefits from outsourcing, because they have not realized the expected cost reductions anticipated from outsourcing their business processes to a third party.
  • Losing control over the outsourced process is not uncommon.

• Privatization

  • The term can also mean government outsourcing of services or functions to private firms, e.g. revenue collection, law enforcement, and prison management.
  • An outsourcing deal may also involve transfer of the employees and assets involved to the outsourcing business partner.
  • Union busting is one possible cause of outsourcing .
  • However, outsourcing is not solely a U.S. phenomenon as corporations in various nations with low tax rates outsource as well, which means that high taxation can only partially, if at all, explain US outsourcing.
  • For example, the amount of corporate outsourcing in 1950 would be considerably lower than today, yet the tax rate was actually higher in 1950.

• Offshoring

  • More recently, offshoring has been associated primarily with the sourcing of technical and administrative services that support both domestic and global operations conducted outside a given home country by means of internal (captive) or external (outsourcing) delivery models.The subject of offshoring, also known as "outsourcing," has produced considerable controversy in the United States.
  • Business process outsourcing (BPO) refers to outsourcing arrangements when entire business functions (such as Finance & Accounting and Customer Service) are outsourced.

• Network Structure

  • A firm using a network structure may outsource certain tasks to external service providers and managers to coordinate external relations.
  • Companies that outsource their help desk functions to call centers in foreign countries are creating a network structure through its contract.
  • For example, H&M is outsourcing its clothing to a network of 700 suppliers, more than two-thirds of which are based in low-cost Asian countries.

• Summary, exercises, and references

  • On what basis does a company decide whether to outsource or not?
  • Wang. " Development if Outsourcing Theory and Practice. " Idea Group Inc., 2006.
  • "Business Process Outsourcing: Process, Strategies, and Contracts. " John Wiley & Sons, Inc. 2000.

• Marketing Intermediaries

  • Intermediaries are a powerful resource that enable organizations to outsource specific business functions in order to focus more on their core competency.
  • Instead, they outsource many of these aspects to intermediaries.
  • Collaborating with one or more partners can enable an organization to focus on what it is that they do best (core competency) and, in turn, outsource other aspects of the value chain to organizations who are best at that particular function.
  • As a result, some organizations prefer outsourcing this as well.
  • What's most important to understand about intermediaries is that they are a trade-off, where an organization recognizes the value of outsourcing a function relative to the opportunity cost of building that competency internally.

• The Internationalization of the United States

  • The internationalization of the United States has become apparent through the processes of free trade, outsourcing, exporting of American culture, and immigration.
  • In business, outsourcing involves the contracting out of a business process to another party.
  • The term "outsourcing" came from the words "outside resourcing," and it can include both foreign and domestic contracting.
  • Globalization allows many American corporations to outsource manufacturing and service jobs from the United States to lower-cost locations (such as developing or Third World countries).
  • The financial savings from lower international labor rates can provide a major motivation for companies to outsource, and many corporations take advantage of the lower wages and lack of benefits they can provide workers in lower-income countries.