LYCOS RETRIEVER 
Outsourcing
built 186 days ago
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. An example of a manufacturing company outsourcing would be Dell buying some of its computer components from another manufacturer in order to save on production costs. Alternatively, businesses may decided to outsource book-keeping duties to independent accounting firms, as it may be cheaper than retaining an in-house accountant.
Source:
Outsourcing of work processes is an action of transferring some part of an organizational process to a third party, whose specialization lies in the specific department. Offshore Outsourcing on the other hand, refers to this third party or the vendor, or provider being situated on a foreign land, which is considered to be a place away from the work location of the original organization.
Source:
Outsourcing has had a difficult year in North America. There are many explanations, some point to quality concerns, some to governance concerns, and some to a reduction in value caused by the combination of labor shortages and currency fluctuations. All of these represent a change in the risk-reward analysis that many are seeing with regard to outsourcing. The bad-news stories in the press continue to pump up the “risk side” of the outsourcing equation – particularly to Asia – while the currency fluctuations and tightening labor markets reduce the “reward side” of the same equation. The “plus side” of outsourcing is notably silent – there are simply no “good news” stories in either the press or the paid media.
Source:
Outsourcing has its place. It can be a cost effective method of supplementing in-house capabilities, providing additional expertise, and allowing an organization to concentrate its increasingly limited resources on those efforts which most greatly support its strategic mission.
Source:
Outsourcing could lead to communication problems with transferred employees. For example before transfer staff have access to broadcast company e-mail informing them of new products, procedures etc. Once in the outsourcing organization the same access may not be available. Also to reduce costs, some outsource employees may not have access to e-mail, but any information which is new is delivered in team meetings.
Source:
Outsourcing trends are cyclical. Various industries and functions alternate between outsourcing and in-house management. In the 80s it was very popular to outsource computing functions. Companies like EDS and SCT made millions of dollars taking over computing departments. Presently, many institutions who used to totally outsource IT have moved it back in-house, citing higher costs, lack of flexibility, and/or lack of responsiveness as the primary reasons.
Source:
MORE ABOUT
Outsourcing