Outsourcing business processes Essay

Outsourcing business processes Essay

Length: 1994 words (5.7 double-spaced pages)

Rating: Powerful Essays

Open Document

Essay Preview

Outsourcing Business Processes
This paper captures the most prominent services and issues associated with today's outsourcing environment. Outsourcing is the modern business term for having other companies accomplish basic business processes rather than doing them inhouse. While outsourcing has always been an important business option, modern technical capabilities are fast making outsourcing a critical requirement in competitive, cost conscious industries. However, our recent experience with terrorist challenges indicates that a second look is needed to ensure that outsourcing risks are still acceptable.
This paper (1) benchmarks classical (but modern) outsourcing methods to provide a starting point, (2) notes what information system services are being outsourced, (3) provides examples of how those services were being promoted and leveraged, with some comments on terrorist related risks, and (4) indicates how the experts suggest that outsourcing, if it is reliable and secure, should be addressed in contracts (incentives). An awareness of these basic aspects of outsourcing is important to the business analyst or consultant.
Benchmarking Modern Outsourcing
Charles L. Gay and James Essinger (2000) provide not only a generic (non-high-tech) framework within which to view modern, high-tech outsourcing, they also provide this framework from the British perspective, often using United States companies as examples. They list numerous benefits and hazards of outsourcing, only indirectly considering terrorist acts, and they explore the different business relationships that apply in the world of outsourcing. Based on their perspectives, we can conclude that outsourcing is a well developed but also complex topic, one that is often over simplified and, thus, is often improperly implemented.
Nevertheless, with the British framework in mind, one should view the numerous and quickly evolving high-tech extrapolations of outsourcing as less intimidating and, also, less risky from a business perspective, at least as view from their pre-September thinking. With a few rather obvious guidelines in place, a business consultant (certainly an information technology business consultant) should be able to recommend to a client what aspects of the client's business can and should be outsourced. The consultant can also be very helpful in selecting an appropriate source of thos...

... middle of paper ...

...centive. Thus, incentives should be viewed as business investments in which the return on the resources invested is expected to make the investment worthwhile. Incentives are likely to increase good will and encourage both parties to overlook petty issues, resulting in a win-win situation. Competitive bids from outsourcers are more likely to win the contract if their proposal reflects good business investment incentives. Types of incentive include reciprocal business actions such as pooling core competencies (synergism). For example, EDS outsourced its network to WorldCom, and WorldCom outsourced its information technology capabilities to EDS, increasing the amount of business and business efficiency for both companies. (Bender, 2000)
Another type of incentive is a joint venture established to pursue a new idea. Each company applies its best talent and efforts and shares in the profits. This type of incentive can be presented in a way that makes the consulting costs appear to be zero, although the consultant will share in the profits resulting from the joint venture. The approach to contracts and incentives masks the fact that a bilateral outsourcing contract has been established.

Need Writing Help?

Get feedback on grammar, clarity, concision and logic instantly.

Check your paper »

Outsourcing And Outsourcing : Outsourcing Essay

-   Pros and Cons of Outsourcing and Offshoring Businesses face lots of challenges today during their development and growth, and they should decide how much financial investment are they want to put into the development of certain projects. When they make decision, business owners find the idea of developing an in-house team dedicated to certain project much more expensive than the company’s current situation can control. That’s why they turn to find alternatives. In many cases the alternative is finding someone to do it for you at lower costs....   [tags: Outsourcing, Offshoring]

Powerful Essays
972 words (2.8 pages)

Outsourcing, Recruitment, And Customer Support Essay examples

- Introduction Outsourcing is a strategy that an organization uses to transfer parts of work to outside suppliers rather than completing it in-house. It is a cost-saving means to improve the quality of services, as well as to raise revenue for an organization. Outside suppliers will take the responsibility of conducting the program and maintaining the organization’s assets when the work is outsourced to them. The outcome of outsourcing mainly depends on the vendor’s ability to create value for both parties under a contract....   [tags: Outsourcing, Management, Offshoring]

Powerful Essays
1055 words (3 pages)

Essay about Outsourcing Information Security Consultants

- Introduction Outsourcing is a technique for companies to reassign specific responsibilities to external entities. There are several motivations for outsourcing including organizational, improvement, cost, and revenue advantages (Ghodeswar & Vaidyanathan, 2008). The assignment research objectives were (a) to gain insight into securing strategic partnerships in the information technology (IT) arena; (b) to understand the choices made to reduce information and security risks by exploring the different outsourcing techniques, and; (c) to understand how business process associated with outsourcing will stimulate awareness on how the process is interlinked with human behaviors....   [tags: information technology outsourcing]

Powerful Essays
1798 words (5.1 pages)

Outsourcing And Outsourcing : Outsourcing Essay

- “Present two arguments for and two arguments against a U.S. company offshoring the management of its customer relationships to technical and managerial personnel in a less-developed country.” Offshoring or offshore outsourcing is the practice of a company or a firm hiring or contracting in utilizing the services, skills or labor of the personnel from an outsourcing service provider that specializes in the need that they are looking for such as develop systems, customer service or even write code either from a developing or under developed countries, in their efforts to lower their operational costs and improve their service efficiencies and quality of their products....   [tags: Customer relationship management]

Powerful Essays
933 words (2.7 pages)

Essay on Disadvantages of Business Process Outsourcing

- ... Team A is UBS investment banking operations located in UK. It is planed to be offshore outsourced to an external company located in a foreign country. A team of offshore workers came to UK and started to learn tasks sitting beside their onshore partners before they can go back to the home country to begin the actual work. Before the transition period, the outsourcing plan and transition arrangement have been announced in the team meeting. At the beginning of the period, UBS management advised Team A employees in a one-to-one meeting if he or she is a “survivor“ (being reallocated to other teams within UBS, getting interview opportunities in other teams or being laid-off) and that the Tea...   [tags: bank industry, management]

Powerful Essays
1780 words (5.1 pages)

Essay The Practice of Outsourcing

- “The practice of outsourcing has developed rapidly in recent years and has moved on from involving relatively peripheral activities such as catering and security as more and more companies have come to appreciate the role it can play in strategy” (Philip Sadler & James C. Craig, 2003). At the moment, outsourcing encompasses manufacturing, design, distribution, human resource management and information systems. Outsourcing takes place when a company makes a decision to consent to an outside company to take responsibilities for certain divisions of their operation....   [tags: Business, Globalization]

Powerful Essays
1691 words (4.8 pages)

Business Process Outsourcing Essay

- The trend in the world of business grows rapidly. Historically, it is difficult to find the best solutions for the common issues in business such as quality, cost and innovation. Nevertheless, business experts have reacted by implementing strategies. One of these strategies is "the farming out of services to a third party" (Overby 2007), which is called outsourcing .According to The Daily Telegraph (2007), worldwide outsourcing is now valued at approximately $US4 trillion. Originally, it was thought that only IT management could be outsourced....   [tags: Globalization Business Offshore Outsourcing]

Powerful Essays
1337 words (3.8 pages)

Outsourcing Essay

- For my topic I chose outsourcing. Outsourcing has positive and negative impacts on the global business world. When thinking about outsourcing there are quite a few aspects that have many sides. Outsourcing has been known all over the world. In reviewing outsourcing you must take into consideration every single detail that is involved into making outsourcing what it has become today. As you continue to read this paper you will learn how outsourcing has changed lives for better and for worse. Outsourcing has been a topic that has also made some quite skeptical....   [tags: Outsourcing, Thought, Mind, People, Trade union]

Powerful Essays
1030 words (2.9 pages)

IT/IS Outsourcing Essays

- I. Reduce Cost When using outsource it would reduce the costs associated with employees such as recruitment costs, payroll tax, insurance and other employee. With this, companies do not need to invest in employee training as it is the outsourcing expertise better quality at a lower cost. However, it also helps reduce cost of operational cost. With increasing operational efficiency of existing business processes supported by IT can reduce operating costs. For example, the company can reduce or remove IT maintenance they provided by passing to vendor to manage their system or new technologies they have....   [tags: cost reduction, management, business, IT]

Powerful Essays
1457 words (4.2 pages)

It Outsourcing Essay

- It Outsourcing INTRODUCTION Companies are increasingly outsourcing the management of information technology (IT) for reasons that include concern for cost and quality, lagging IT performance, supplier pressure, access to special technical and application skills, and other financial factors. The outsourcing solution is acceptable to large and small firms alike because strategic alliances are now more common and the IT environment is changing rapidly. REASON TO OUTSOURCE Although the mix of factors raising the possibility of outsourcing varies widely from one company to another, there are a series of themes that explain most of the pressures to outsource....   [tags: Globalization Essays, Papers]

Powerful Essays
1040 words (3 pages)