Outsourcing introduction & issues

N
Report on contemporary
              issues in management




                          Submitted By

                           Nishant sharma
                           IIIM,Jaipur
INTRODUCTION
                            INTRODUCTION
A Working Definition of Outsourcing

                           Services
   COMPANY                                       OUTSOURCER

                    Organization Service
                       Level      Level
                     Agreement Agreement




             Outsourcing denotes the continuous
             procurement of services from a third
             party, making use of highly integrated
             processes, organization models and
                     information systems.
INTRODUCTION
                           What is Outsourcing?
  A Working Definition of Outsourcing

Outsourcing -
   “the strategic use of outside resources to perform activities
   traditionally handled by internal staff and resources” Dave
   Griffiths

Why Outsource?
  Provide services that are scalable, secure, and efficient,
  while improving overall service and reducing costs
Why do Companies Outsource?
Key areas of outsourcing ?

•Information Technology/IT solutions

•Call Centers

•Finance & Accounting Outsourcing

•Procurement Outsourcing

•Textiles

•Manufacturing

• Human resource Management
outsourcing
Advantages of outsourcing




   Cost           Skilled             Time zone
 Effective       Expertise            difference




                  Increased
Focus on core                         Distribution of
                 productivity
competencies                                risk
                and Efficiency




 Improving        Better
                                       Access to
  customer        people
                                       world-class
   service      management              solutions
Disadvantages of outsourcing




Loss Of                            Threat to
             Hidden               Security and
Managerial
             Costs               Confidentiality
Control




                Tied to the
   Quality                       Bad Publicity
              Financial Well-
  Problems   Being of Another     and Ill-Will
                 Company




              lose talent
  Lack of
             inside within        Linguistic
 customer
                 your              barriers
   focus
               company
Problems with outsourcing



•   Loss of Control
•   Increased cash outflow
•   Confidentiality and security
•   Selection of supplier
•   Too dependent on service provider
•   Loss of staff or moral problems
•   Time consuming
•   Provider may not understand business environment
•   Provider slow to react to changes in strategy
Types of outsourcing



•   Business process outsourcing (BPO)



     BPO is a subset of outsourcing that involves the contracting of
     the operations and responsibilities of specific business functions
     or processes to a third-party service provider.
Types of outsourcing



• Knowledge process outsourcing (KPO)


   KPO describes the outsourcing of core business activities, which often are
   competitively important or form an integral part of a company's value
   chain. Therefore KPO requires advanced analytical and technical skills as
   well as a high degree of proprietary domain expertise
Types of outsourcing



• Legal process outsourcing (LPO)


    LPO refers to the practice of a law firm or corporation obtaining legal
    support services from an outside law firm or legal support services
    company. This process has been marked by the practice of outsourcing
    any activity except those where personal presence or contact is
    required.
Types of outsourcing



• Recruitment process outsourcing (RPO)


       Recruitment Process Outsourcing is a form of business
       process outsourcing (BPO) where an employer outsources or
       transfers all or part of its recruitment activities to an
       external service provider.
Types of outsourcing



• Engineering process outsourcing( EPO)



         EPO offers global consulting and outsourcing services
         providing end-to-end services in the areas of Engineering and
         Technical Process Outsourcing.
1970s to early 1990s   1994 to 1998   1999 to 2001
                                                     2001 to
                                                     present
Figure 1: How will the outsourcing market develop?
•    40% to 50% of the top 500 companies in the world is leveraging
    on outsourcing for most of their business processes.

• current figures values this robust industry to a staggering $20
billion USD.

• On an average global outsourced projects involve about 28% that
belong to the hardcore IT sector, 11% to finance sector, 15% to sales
and marketing and 9% from administrative sector. The remaining 22%
belong to many other different sectors such as consumer distress
calls, general data segregation jobs, tourism etc.
Outsourcing introduction & issues
Outsourcing introduction & issues
1 sur 19

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Outsourcing introduction & issues

  • 1. Report on contemporary issues in management Submitted By Nishant sharma IIIM,Jaipur
  • 2. INTRODUCTION INTRODUCTION A Working Definition of Outsourcing Services COMPANY OUTSOURCER Organization Service Level Level Agreement Agreement Outsourcing denotes the continuous procurement of services from a third party, making use of highly integrated processes, organization models and information systems.
  • 3. INTRODUCTION What is Outsourcing? A Working Definition of Outsourcing Outsourcing - “the strategic use of outside resources to perform activities traditionally handled by internal staff and resources” Dave Griffiths Why Outsource? Provide services that are scalable, secure, and efficient, while improving overall service and reducing costs
  • 4. Why do Companies Outsource?
  • 5. Key areas of outsourcing ? •Information Technology/IT solutions •Call Centers •Finance & Accounting Outsourcing •Procurement Outsourcing •Textiles •Manufacturing • Human resource Management
  • 7. Advantages of outsourcing Cost Skilled Time zone Effective Expertise difference Increased Focus on core Distribution of productivity competencies risk and Efficiency Improving Better Access to customer people world-class service management solutions
  • 8. Disadvantages of outsourcing Loss Of Threat to Hidden Security and Managerial Costs Confidentiality Control Tied to the Quality Bad Publicity Financial Well- Problems Being of Another and Ill-Will Company lose talent Lack of inside within Linguistic customer your barriers focus company
  • 9. Problems with outsourcing • Loss of Control • Increased cash outflow • Confidentiality and security • Selection of supplier • Too dependent on service provider • Loss of staff or moral problems • Time consuming • Provider may not understand business environment • Provider slow to react to changes in strategy
  • 10. Types of outsourcing • Business process outsourcing (BPO) BPO is a subset of outsourcing that involves the contracting of the operations and responsibilities of specific business functions or processes to a third-party service provider.
  • 11. Types of outsourcing • Knowledge process outsourcing (KPO) KPO describes the outsourcing of core business activities, which often are competitively important or form an integral part of a company's value chain. Therefore KPO requires advanced analytical and technical skills as well as a high degree of proprietary domain expertise
  • 12. Types of outsourcing • Legal process outsourcing (LPO) LPO refers to the practice of a law firm or corporation obtaining legal support services from an outside law firm or legal support services company. This process has been marked by the practice of outsourcing any activity except those where personal presence or contact is required.
  • 13. Types of outsourcing • Recruitment process outsourcing (RPO) Recruitment Process Outsourcing is a form of business process outsourcing (BPO) where an employer outsources or transfers all or part of its recruitment activities to an external service provider.
  • 14. Types of outsourcing • Engineering process outsourcing( EPO) EPO offers global consulting and outsourcing services providing end-to-end services in the areas of Engineering and Technical Process Outsourcing.
  • 15. 1970s to early 1990s 1994 to 1998 1999 to 2001 2001 to present
  • 16. Figure 1: How will the outsourcing market develop?
  • 17. 40% to 50% of the top 500 companies in the world is leveraging on outsourcing for most of their business processes. • current figures values this robust industry to a staggering $20 billion USD. • On an average global outsourced projects involve about 28% that belong to the hardcore IT sector, 11% to finance sector, 15% to sales and marketing and 9% from administrative sector. The remaining 22% belong to many other different sectors such as consumer distress calls, general data segregation jobs, tourism etc.