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Outsourcing: For and Against

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by

Heather Allan

on 19 June 2013

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Transcript of Outsourcing: For and Against

Table of
Contents
What is Outsourcing?
For Outsourcing
Against Outsourcing
Conclusion
What is Outsourcing?
Contracting, Sub-contracting, making an arrangement or sub servicing a part of the internal business process with an outside company.
Going "out" to find the "source"
FOR OUTSOURCING
AGAINST OUTSOURCING
OUTSOURCING
FOR And Against
Heather Allan
Ahmed Awad
Zachary Belford
Chandel Metcalf
Nathan Duncan
CONCLUSION
QUALITY RISK
SECURITY RISKS
FINANCIAL RISKS
LABOUR RISKS
Tied to the financial well-being of another company.

Extreme consequences if the outsourcing company goes bankrupt.

Things to consider:
Foreign country's economy and government.
Foreign country stability.
Threat to security and confidentiality of information.

Sensitive information disclosed

Sharing of confidential information.

Decrease competitive advantages
Skip production steps
Choose cheaper resources
Creating low quality products
Unmet standards
Customer satisfaction and quality can decline

Reasons Company Might Consider Outsourcing
Costs
Reduce and control business and operating costs and avoid overhead costs ( eg higher taxes or higher energy costs)
Time
Time saving (concurrently)
Resources
The ability to focus on core business
Improve the accessibility of resources that may not be available within
With an efficient management of resources the company can expand and grow
Global Talent Pool
Salary Difference
Global Connectivity
Increasing English literacy

Time-To-Market
SaaS
Nike+, Pebble Watch

LOSS OF KNOWLEDGE
Unable to maintain skillful workforce

Loss of understanding, expertise, and process knowledge

Results in lacking R & D

Difficult to innovate and generate profit
INTERNAL LABOUR RISKS
EXTERNAL LABOUR RISKS
Low employee productivity

Low employee morale

High absenteeism

Loss of organizational culture

Decline in operational quality
Less tactful

Not upholding organizational standards

Difference in employee practices, quality standards, performance measures
Full transcript