The Benefits and Risks of Outsourcing - 1269 Words

Out sourcing Development of specific skills: Out sourcing benefits the development of specific skills at a corporation level the same way off shoring does at a global level. Companies outsource in order to take advantage of specialized skills and knowledge that itself does not own or that can’t be efficiently acquired. In this case out sourcing leads to higher efficiency and better quality provided by third parties for a specific business processes. Moreover the third parties can further specialize to take advantage of the resulting economies of scale and mitigate the possible shortage of specific skilled and talented workers. Focus on core competencies: Similar to the effect on the third parties, out sourcing provides out-sourcing companies the opportunity to focus on specific business competencies in which they possess clear comparative advantage. Therefore resources and capitals are not used in tasks where the company does not possess comparative advantage, but are utilized at their full potential and highest efficiency in their core business processes. Labor flexibility: Out sourcing means that a company does not actually own or invest in the capital and resources required for that specific business process, but it acquires it from a third part. As a consequence, it posses the flexibility to increase or decrease the quantity of services or merchandise provided by the third party according to its needs, as long as it does not breach the contract. In extreme cases, theShow MoreRelatedThe Risk And Benefits Of Outsourcing Supply Chain And Risk Management Essay961 Words   |  4 Pages The Risk and Benefits of Outsourcing Supply Chain and Risk Management. How Boeing 787 Supply Chain Issues Affected Other Industries? Debates between business professionals regarding risk and benefits of outsourcing is becoming increasingly heated with particular focus on risks as unanticipated costs, potential for setbacks, integration difficulties, quality or benefits as minimize overall cost, focus on other business area, meet customer demand and flexibility. However, being prepared, doneRead MoreOutsourcing at Office Supply1540 Words   |  7 PagesOFFICE SUPPLY, INC OUTSOURCING IT INFRASTRUCTURE TO MAXIMIZE BUSINESS VALUE S544 - 12235 - DECEMBER 7, 2009 Aditi Parekh | Brian Honaker | Johann Fischer | Matt Blair Recommendations for Outsourcing at OSI 2 Business Strategy Costs/Benefits Implementation Change Management Risks †¢ Decrease infrastructure costs by utilizing a more specialized, third-party staff. †¢ Experience cost-savings during the 2nd year, but face increased expenditures during 1st year. †¢ Maintain availability andRead MoreBenefits Of Outsourcing Supply Chain Management942 Words   |  4 PagesOutsourcing in different countries of the world has grown and is continuing to grow very rapidly, at a recorded rate of 20%-25% a year (Top 10 Risks of Offshore Outsourcing). Because of the many advantages that businesses can gain from outsourcing, there is no certainty that there will be a reduction of outsourcing anytime soon. The main advantage of making this business decision is that the businesses will have more time to focus on the principal aspects of their business, while the third partyRead MoreOutsourcing : Effect Of Outsourcing1631 Words   |  7 Pages OUTSOURCING : EFFECTS OF OUTSOURCING IN AMERICA DHANASHREE AROTE 83360 INDEX Serial No. Topic Page No. 1. Introduction 3 2. Benefits of Outsourcing 4. 3. Negative Effects 5 4. Managing Outsourcing 7 5. 6 Key Trends 8 6. Conclusion 8 7. References 9 INTRODUCTION In today’s global business competitive environment, business organizations must innovate and adapt new strategies to sustain revenue generation, value while remaining competitive. Organizations have embraced outsourcingRead MoreEssay on Outsourcing Jobs To Foreign Countries1420 Words   |  6 PagesOutsourcing Jobs to Foreign Countries Due to the lack of employment in foreign countries, companies that outsource work overseas are not only beneficial to themselves but also to the service providers being employed. The initial benefit that catches the public’s eye from outsourcing is a cost reduction on the company’s part. But that is not the only benefit from outsourcing or even the key benefit that causes companies to outsource, on the other hand, outsourcing has its disadvantages as wellRead MoreA CIOs Framework for Outsourcing IT Infrastructure1665 Words   |  7 PagesEvaluating Outsourcing IT Infrastructure Decisions: Considerations for Chief Information Officers (CIOs) Introduction The decision to outsource the critical infrastructure platform of an enterprise, which often includes support for enterprise applications essential for the business ot function, is one with long-range, strategic implications. The role of the CIO is quickly changing to be a strategist first and technologist second, concentrating on how IT infrastructure can be successfully usedRead MoreOutsourcing : Outsourcing And Outsourcing1541 Words   |  7 Pagesyears, although outsourcing has been seen as a common method used to achieve a successful business, many literatures on Information System still believe that most of the software could be better off build in-house and this can also be supported with the fact that there are evidences of organisations that took a significant damage from outsourcing. Therefore, whether or not a company should outsource part of their projects, it all depends on how the organisation manages its outsourcing system. This paperRead MoreA Short Period Of Declini ng Demand1062 Words   |  5 Pagesrecession and a short period of declining demand, the outlook for outsourcing and off-shoring showed an increasing trend for the foreseeable future. As companies realign their strategies to better compete in the world stage, the projections indicate that this practice will grow over different dimensions including function, services and geographic locations (Deloitte, 2014). The main benefit for the companies that use outsourcing and off- shoring is the positive impact it has on their bottom lineRead MoreCase 1 Who Makes The Apple Iphone769 Words   |  4 Pagesï » ¿February 4, 2015 Who Makes the Apple iPhone 1. What are the benefits to Apple of outsourcing the assembly of the iPhone to foreign countries, and particularly China? What are the potential costs and risks to Apple? There are many benefits for Apple in outsourcing their assembly line to China. Although Apple claims that the decision wasn’t about the cheap labor, it all comes down to the money. The decision was rooted in the fact that it would save Apple a lot of money. It is understandable thatRead MoreOutsourcing : A And Viable Option1559 Words   |  7 Pagessimilar companies of Triad’s size have traditionally seen outsourcing as a smart and viable option to optimize business processes and ultimately improve the bottom line. It’s important that Triad assesses the pros and cons involved with outsourcing, such as cost/benefit, potential risks, contractual arrangements and service levels, and necessary controls, before making any changes. We should also define what operations we are considering outsourcing – as opposed to a company-wide reorganization and what