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strategic Outsourcing

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by

Arab Abuarab

on 20 December 2013

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Transcript of strategic Outsourcing

Strategic
Outsourcing

Table of Contents

1- Definition
2- Introduction
3- Strategic approach
4-Outsourcing benefits
5- Examples


Strategic Approach
1- Concentrate on
core
competence



Toyota
J
ust
I
n
T
ime
1- Maximize returns
2- Well develop core competence
3- Reduce cost
4- Decrease risk
Outsourcing Examples
Presented by:
Arab Abuarab

Oct 25th 2013

Outsourcing:

Is the act of
transferring
some of
an organization’s recurring internal activities and decision rights to outside providers, as set forth in
a contract.

MBA 610
Boeing 787
(Dreamliner)
James Quinn & Fred Hilmer
Information Technology
2- Strategically
outsource
other

activities
Benefits
Nike
- Largest supplier of athletic shoes in the
world

- They outsource 100% of production,
manufactures and advertising.

- The core competence is R&D and Marketing,
Distribution and Sales.

- Nike earned 31% ROE for its
shareholders for past decade.
Apple
- 70% of manufactures
- Outsource critical items
" Design, Printers and Marketing"
- The core competence is
Apple DOS (IOS)

- 1980's Achieved:
1- $100 M
2- Enjoy 3 times the capital turnover
3- Highest market value vs fixed investment ratio.
Apple
- 70% of manufacture
- Outsource critical items:
"Design, Printers and Marketing"
- The core competence is
Apple DOS (IOS)
-
1980
's they achieved:

1-
$100M

2-
enjoyed 3 times of capital return
3-
Highest market value vs fixed
investment ratio
Strategic:

Is a
high level plan
to achieve one
or more goals under conditions of uncertainty.

Strategy is
important
because the resources available to achieve
these goals are usually limited.

7 Steps to
Successful Outsourcing
1- Planning initiatives.
2- Exploring strategic implications

3- Analyzing costs/performance
4- Selecting providers
5- Negotiating terms
6-Transitioning resources
7- Managing relationships

risk, team
vision, core competencies, structure
qualifications
high-level issues,
deal breakers

communication
human resources
other production factors

performance reports

Thanks
Full transcript