Disadvantages Of Outsourcing

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As mentioned earlier outsourcing forms a part of decentralization structure. This concept of Outsourcing originally came from “American Glossary” in the year 1981. Outsourcing offers cost-effective benefits along with non-economic benefits. Outsourcing is a process of delegating a business-process of a company to a third company, leveraging benefits of reduced costs, improved quality and innovations. Outsourcing/ Downsizing became the most prevalent business trends. A very commonly considered reason for outsourcing is reduced costs, where specialized providers are more efficient and economic than a vertically integrated organization. Some organizations found it more affordable to access a few key resources from other organizations then to have an in house department working on the same. Organizations benefit from outsourcing non-core activities especially when they work in a dynamic business…show more content…
The whole process of outsourcing was based on cost efficiency and not value addition of providing world class solutions. They outsourced all core business functions and later faced difficulties of dependence on vendors. There were limitations set on Airtel to use creative new applications from IBM deal. There were handovers of network assets built by Airtel. IBM had cheated Airtel by using it as a case study to generate more business from other telecom players in this sector, therefore Airtel reduced the value its second contract with IBM taking a few core functions back. Airtel could not dissolve the contract with IBM as it had to pay as mentioned in the contract and would lose out on the applications developed by IBM. It would also be technically arduous for Airtel to completely transfer the functions to a third vendor, since a few software and hardware services have been developed by
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