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Outsourcing on Today’s Graduating Engineers

Satisfactory Essays
Outsourcing on Today’s Graduating Engineers

Engineers, no matter what discipline, are a high commodity these days. The industry is at a point where a lot of the older engineers are retiring, which leaves jobs and openings for engineers just graduating from college. The question is where will they be working. Will they be working for a Fortune500 company or and up-and-coming company? A lot of companies outsource work these days. One might ask, “What is outsourcing?” In this paper, I will explain to you outsourcing, and its effects on today’s graduating engineers.

What is Outsourcing?

Outsourcing is subcontracting a process, such as product design or manufacturing, to a third-party company. The decision to outsource is often made in the interest of lowering firm or making better use of time and energy costs, redirecting or conserving energy directed at the competencies of a particular business, or to make more efficient use of land, labor, capital, (information) technology and resources.

Process of Outsourcing

1. Outsourcing Decision - The decision to outsource is taken at a strategic level and normally requires board approval. The process begins with the client identifying what is to be outsourced and building a business case to justify the decision. Only once a high level business case has been established for the scope of services will a search begin to choose an outsourcing partner. Due to the complexity of work definition, pricing, and legal terms and conditions, clients often utilize the advisory services of outsourcing consultants to assist in scoping, decision making, and vendor evaluation.

2. Suppliers Proposals – This is when a company contacts suppliers asking them for a proposal and a price.

3. Supplier Competition – This is when a company receives proposals and pricing from suppliers. The company evaluates the pros and cons of each supplier. The company conducts meetings with the suppliers to find out their plan for execution this project/proposal. From there, the company creates a Bid-Tab sheet comparing each supplier.

4. Negotiations - The negotiations take the suppliers’ proposal, the Bid-Tab sheet and convert these into contract agreements with the suppliers for the best contract.

5. Contract Finalization - a contractual agreement that defines how the client and the supplier will work together. This is a legally binding document and is core to the governance of the relationship. There are three significant dates that each party signs up to the contract signature date, the effective date when the contract terms become active and a service commencement date when the supplier will take over the services.
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