Feasibility And Benefits Of Business Process Outsourcing Essay

Because many businesses in the US have more often began outsourcing different business products instead of doing them in-house, it is important to understand why outsourcing may be the best option. Although many tie outsourcing to foreign markets, outsourcing can include both foreign and domestic markets. By entering into a contractual agreement, outsourcing allows organizations to pay for services they need. This gives the option for a business to get professionals to perform services for them that the business may not have the staff for. Outsourcing provides a cost saving-strategy that is usually more affordable. Ultimately,

In general, the outsourcing is hiring the foreign workers/company to do a particular task, as opposed to hiring domestic workers/company. Besides the outsourcing, the international purchase is an essential activity of companies. In the trend of a booming global economy, a company only focuses on its core value and hire suppliers to supply the necessary product and service. The relationship between companies are complicated and interdependent.

There are many benefits of outsourcing that companies and countries seize to take advantage of. The biggest benefit is reduced costs of infrastructure and labor. According to the OneNeck IT Solutions, “The attraction to overseas outsourcing has traditionally been reduced costs. By moving support services to India or China, for

The outsourcing of non-core business and services has risen in recent years. The top benefactor of this rise has been India. Corporations have found a profusion of well-trained, English-speaking workers to cram into call centers and customer service jobs. This is even happening in high-skill positions like hospital X-rays technicians also. India is seen as the pioneer in outsourcing jobs

· Choose the right location: The type of work being outsourced will influence the location. India has gained a reputation for software development. Between 2003 and 2004 it has seen over a 30% growth in software and IT service exports, and by the year ending in March, 2004, Indian companies have earned $12.5 billion in technology exports. But India is not the only source of reliable but inexpensive labor. Countries such as China, the Philippines, Romania, Argentina, and even Ghana and Ireland are all centers for offshore operations of various

Outsourcing is the notion of the day in today 's business world. Outsourcing means to get the product or service on contractual basis from an outside supplier. Now this term is also developing widely in the field of information technology. The small and large scale industries utilise IT outsourcing and business process outsourcing to have the benefits for business like cost reductions, high production and efficient business activities. For the best use of IT outsourcing, there must be well co-ordination between IT and business procedures. This report will flash light on IT outsourcing, business and the alignment of IT with business processes. We will have an idea that How IT outsourcing will impact the business.

A typical example would be the evolution of ERP function to improve financial reporting and transaction processing. Organizations have accepted this IT solution because it helps strengthen several business processes and provide opportunities for growth. However, implementing ERP solutions are somewhat demanding and time consuming, implementation may take several months before completion. Although outsourcing may pose as a best risk-mitigation approach to business solutions, there are also many challenges associated with outsourcing IT solutions. It is critical that before organizations make decisions on whether to outsource a section of their business, they understand the implications such as risks and benefits before going into contracts. The purpose of this paper is to describe outsourcing as it relates to IT solutions. Following the research questions, a background that discusses outsourcing is presented which addresses reasons for outsourcing IT solutions, benefits involved in outsourcing, risks involved in outsourcing IT projects and best practices of outsourcing ERP solutions. Also, a section of this paper discusses outsourcing as it relates to enterprise resource planning (ERP), this is because ERP is considered a big player in IT solutions provision, which have been adopted and implemented in their various IT infrastructure.

There are many reasons that companies provide for the determining factor for outsourcing. Some of these reasons include reducing costs, compensating for missing skill sets, improving quality, increasing productivity, avoiding tying up internal IT resources, expanding global capability, improving time to market, and allowing rapid response in resource demand. Savings from outsourcing have allowed reinvestment into onsite projects .

Outsourcing has been around in some shape or form for many years. The outsourcing today is a fairly recent development however. It has developed off the economic relationship between developed and developing countries. This started around the 1970’s with companies like Dell and Cisco (Leavy 47). Once other companies saw the potential profits to be made from outsourcing, they too began to outsource basic manufacturing overseas (Leavy 47). This began an outsourcing revolution that resulted in today’s current economic situation. Developed countries are labeled as the “Donor Countries” and send certain parts of their manufacturing overseas (Smith 3). Outsourcing has been defined by the Merriam-Webster Dictionary as “To send away (some of a company 's work) to be done by people outside the company.” In a modern economic sense however, people use outsourcing to mean to send work outside of the original country,usually in order to save money, although it has also been done for political reasons among a multitude of other reasons. Most companies outsource low-level manufacturing. When people think of modern day outsourcing, two main examples

Because of diluting some functions to external sources, they can concentrate more on internal business processes.

Nowadays, every company often looks for various ways to make their company and organization to become more successful than others. Some company also willing to hired someone outside their company for a better services or products. For this kind of actions also known as outsourcing. In order to make a decision whether to outsource or insourcing in organization, managers need to know and understand the advantages and disadvantages of insourcing and outsourcings, their differences and also what the company can get by using either outsourcing or insourcing.

Domestic/international sourcing. Several motivations (e.g. cost reduction, flexibility, access to new technologies and skills, focus on core activities) are encouraging them to outsource and/or localize their (IT or business) processes in foreign countries .These choices determine also relevant risks, such as loss of control, poor service quality, vendor dependency, cost escalation, and security criticalities .

Outsourcing can be defined as ‘the strategic use of outside sources to perform activities traditionally handled by internal staff and resources’. In this strategy, the organizations contract out major functions of their manufacturing products to more specialized and efficient service providers, who later become valued business partners. It looks more like a simple supplementation of resources by subcontracting, but it is actually different to outsourcing. In actual outsourcing, the organization is also involved in substantial restructuring of particular business activities including, often, the transfer of staff from a host company to a specialist, usually smaller, company with the required core competencies. The current stage in the evolution of outsourcing is all about the

Agarwal, R., & Nisa, S. (2009). Knowledge process Outsourcing: India’s emergence as a global leader. Asian Social Science, 5(1), 82–92. doi:10.5539/ass. v5n1p82

The global economic downturn has impacted jobs outsourcing in the BPO industry as it has helped to be one of the largest job creators in India. Due to this, many companies had to increase their operations output and therefore employ more and more people to keep up with the expanding trend. One of the major impacts, being growth and maturity, had an effect on the BPO industry and contributed to the outsourcing companies and continued growth of the industry. The IT and BPO outsourcing boom created a huge impact in the Indian