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.

It is a concept that has evolved from a manufacturing perspective to a strategic perspective, which views the concept as a way for organizations to focus and be more competitive. The basic premise of outsourcing is that a specialist organization can perform a particular service more efficiently than can internal operations because a specialist organization has an inherent advantage in producing and delivering a service. Superior technology, management skills, or economies of scale may contribute to this perception. The type of sourcing relationship depends on whether a long-term or short-term need exists. To save funds used for benefits for regular employees, temporary workers are hired. In this case, the organization (outsourcer) provides all necessary resources except the workers, who are provided by the vendor. For long-term services, the vendor has full responsibility for delivering the service; the outsourcer provides only a liaison.

The fourth advantage to outsourcing is that it can help develop internal staff. As I stated in the advantage above, outsourcing projects help meet performance peaks, but it can also assist in completing projects that are nearing the end of its requirements. What this does is allow the company staff to focus on new initiatives that

2) The company can increase its efficiency and focus on other areas of business if it outsources a particular process.

pearlson (2001) summarized factors lead to the decision to outsource: cheaper costs due to economies of scale, ability to handle peaks in processing,

Outsourcing is when a company purchases products or services from an outside supplier rather than performing the same work within its own facilities, in order to cut costs. In other words, outsourcing is an organization's contractual relationship with a specialized outside service provider for work traditionally done internally by that organization. The decision to outsource is a major strategic one for most companies because it involves weighing the potential cost saving against the consequences of a loss in control over the product or service. Some common examples of outsourcing include manufacturing of components, computer programming services, tax compliance and other accounting functions, as well as payroll and other

Let’s talk about a positive aspect of outsourcing business. “Contractual Obligation: The liability of a service provider is higher than that of an in-house employee. This makes working with them a safer bet for businesses.” At least you can be at ease that the people you are working with overseas are well trained in the business that you are outsourcing.

Outsourcing is a process of a company obtaining the services from an outside vendor. These services can be of different forms like IT services for a software company, voice services for a customer support industry, legal services for companies and small part suppliers for manufacturing companies etc. The main reason for a company to outsource its services is cost savings

Outsourcing Work. Outsourcing means just what it says - going "out" to find a "source" to undertake the work. The most obvious advantage of outsourcing appeared to be the cost savings that would come with not having to purchase additional equipment or work space and not having to add to the employee headcount. However, it was noted that some organisations are now doing more themselves in order to develop or preserve their expertise and self-sufficiency.

An economic take on the benefits of outsourcing is that export services, insurers, for instance, generate jobs and rely on outsourcing for competitive edge. Economists say export services could potentially lose some competitive edge if they could not use foreign suppliers for call centers or other back-office operations. Foreigners are

“Outsourcing is a practice used by different companies to reduce costs by transferring portions of work to outside suppliers rather than completing it internally. Outsourcing is an effective cost-saving strategy when used properly. It is sometimes more affordable to purchase a good from companies with comparative advantages than it is to produce the good internally.”

Cost is a very integral part of accounting and finance for a business. Usually a product or service can be produced or completed at a lower price while achieving the ideal quality measures and standards. Outsourcing services in some business departments such as IT and finance could greatly reduce operating costs savings which will greatly impact the bottom line. Specialization is another key business process in which outsourcing can play a key role. A large percent of businesses products or processes are specialized and outsourcing to another provider could initiate higher quality. Flexibility is another benefit of outsourcing. Flexibility offers the company the benefit of only paying for the service that is integral for operations management. For example, a company could outsource a part of the finance department that handles payroll. Instead of paying an employee full time to

The main reasons why a major corporation consider outsource is to remain competitive with another corporation and utilize the cost. Information technology is the function which is most likely to be outsourced approximately 30% of the time [2].

The trend towards globalization has greatly increased the need for strong interorganizational relationships to ensure a firm's growth and survival. As globalization has placed firms under ever greater competitive stresses, companies are forced to become as efficient as possible in all aspects of their business. One concept that has gained popularity is that of core competency: those things that a firm does especially well and that give it competitive advantage. When firms stray from their core competencies, problems often result. To allow companies to focus on their core competencies, outsourcing has gained in popularity.