Technologies like robotics or others information technology that can provide the competitive advantage, and part of the product itself, is as an advantage to the making of the product, which is aid in the business process, for example, the identification and the understanding of customers itself. Outsourcing is driven by the desire to reduce the costs, by buying an consisted set of scalable processes which is shared by across number of the organizations, after that it follows that none of those areas should be sources for the unique competitive advantage. Once under the wing of third party, they will be no longer unique, but shared. They also are engineered by the lowest possible cost whilst with meeting agreed service standards', they will also be efficient, but not necessarily effective. Lastly, outsource elements that are process to provider which can be delivered to the same output at the lower cost, but it also should be clear, in that so doing, the only competitive advantage accruing will be transient to lowering the costs.
Also it may incur the cost of having to retrain either the managers or the outlet staff assistants on how to do the role of the supervisor and they may demand more pay. Overall I feel that it would be best to de-layer the business and to do so by removing the supervisor’s layer. This is because it would incur a smaller cost financially to remove this layer and lead to more pro’s such as a quicker decision making process and hopefully a more efficient business. Though I would also suggest to Tim that he allow smaller decisions such as whether an outlet is allowed to re order new stock, be down to the managers of the individual outlets.
It also allows the company to respond to manufacturing overhead cost and assumes a more accurate selling price on products in order to make more profits. Company that do not have internal expertise to conduct activity-based costing analysis may think to hire one or ask company that provides this kind of services for help.
Low-cost strategy allows a company to gain a competitive advantage against their competitors in the commodity markets. It also undercuts its rivals on price. Oftentimes, companies are able to gain a high market share due to low cost. Usually cost is a key driving factor for a particular product or business success. Lower cost allows to maintain or increase the profit margins and sustain in a highly competitive markets.
1.0 Critically evaluate the competitive advantage that can be gained by companies through IS/IT outsourcing. Provide suitable example to support your answer. According to Amadeo, 2013, as an employee, a business or a country itself, we need to have a better understanding about competitive advantage and communicate it to the customer. Competitive advantage can differentiate the company and others competitor from the eye of customer. It also will help the company to operate in more efficiency.
1. Cons: Outsourcing HR functions may have some positive changes, but those changes which are not necessarily ones might lead to negative effects. Keeping HR in-house is one of the important parts of some organizations to get the returning of dedication, flexibility and responsiveness from staffs and employees. - Even though the organization may increase productivity and reduce the overhead cost, they lose the ability to follow the improvement of technology and the changes in the HR environment since the supplier does everything. - To maximize the profitability, some of the contractors may reduce their service
Six Sigma focuses on improving current business processes and performance while Lean Manufacturing focuses on the improvement of the processes of an organization by using highly skilled employees to increase speed and quality. Combining the two methodologies creates an organization that focuses on quality, efficiency and speed to lower operational costs and increase profits. By following the Lean Six Sigma methodology, many companies have attempted to create a lean, waste-free environment ultimately at the expense of the employee and occasionally at the expense of the organization. Variability and Failing the Lean Test Creating a process is not always the answer to every organization. Organizations attempting to reduce waste may find themselves stuck trying to understand precisely where vital financial cuts need to take place.
Through outsourcing, the operating costs are expected to reduce for the availability of cheaper labor provided by a vendor. Also, the expert-labor brought by the vendor make up the lack of expertise while a project is conducted in-house. In this manner, the time-consuming would be less than that of in-house as well. With more available budget and time, the organization is able to improve its focus on other core issues. Outsourcing also implies the organization is offered the access to internal resources from its partner company.
Lacey (2015) considers these factors and it could be suggested that creating a positive atmosphere and company ethos could be a relatively cheap method in managing performance. The increase in job enjoyment could assist the engagement of the workforce. Contrary to this view, by replicating ideal working conditions could not only be a costly endeavour, but possibly a wasteful effort. In contrast to Standards oriented approaches, Excellence orientation tends to appeal to the individual over the organisation. It can be argued that the motivation of the workforce could in fact be the determinant of organisational performance.
For the example, if company outsources their information system or information technology to other company or person that more familiar in that work, the organization will save more money and time to hired a new employee in IT department. Besides that, not all new employee expert in information system or information technology. If the employee do something wrong with the system, the whole organization will down if the downtime took much time more than uptime. Company also can focus to market their product and focused on their main business. For the information system of the company, they will outsource their work to the expert to get more efficient system.... ... middle of paper ... ...to the competitor of the organisation, the organisation will loss the profit and can make the whole organisation going down.