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Transcript of Outsourcing
Different wages between western countries and asia
Lower cost for the company
Save on infrastructure and technology
Recruiting and training
Focus on core areas
More free time for other parts of your company
Building your brand
invest in research to improve and further your product
The greater the distance between productivity and management can cause problems during inspections and feedback on both ends.
productivity line is halted
communication barriers (time zone)
Possible loss of control over a company’s business processes
Problems related to quality and turnaround time
Sluggish response times coupled with slow issue resolutions
Jobs that could benefit the United States economy are being outsourced due to avoid certain costs.
such as :
12.1 million Americans are currently unemployed in the United States right now.
Evolution of outsourcing
Dates back to the 1960’s
Started in USA
Company’s adopt business strategies
Trade Adjustment Assistance (TAA)
Some foreign governments are so eager to attract American investment that they favour management over labor. They do not protect their own citizens with strong labor laws, and they do not guarantee workers the right to form unions in order to press for better pay and conditions. Workers are at the mercy of their employers.
CONS OF FOREIGN OUTSOURCING
PROS OF FOREIGN OUTSOURCING
The presence of American companies has a direct benefit on the economies of their host countries. Workers are taught skills and exposed to new technology. Moreover, a strong industrial economy has been proved to be the best way to lift people out of poverty. In time, foreign workers will achieve wages and working conditions comparable to those enjoyed by American workers today. In 2010 this has been seen in China, where a series of strikes at foreign-owned factories have led to workers winning large pay increases, a development that has been publicly welcomed by the AFL-CIO. And in both China and India the willingness of trained workers to move jobs in search of better wages and prospects has forced employers to pay better and offer good working conditions in order to retain their staff.
Is a program that offers assistance to US workers who have lost their jobs as a result of foreign trade.
US have laws protecting health, environment and safety of workers. On the contrary, there are fewer or no laws overseas.
Big economies like China does not worried about waste of manufacturing products. China is famous for pollution, carbon pollution from coal and gas-burning electrical power plants.
Laws and Regulations
India, China, Pakistan do not make high wages compare to US workers. Cheap labor permit cut labor cost in half.
Advantage of Cheap Labor
The return is positive running the organization effectively and more efficiently.
Delivers first-class customer service and product
Excellent knowledge of the English language.
Very good awareness with Western way of life.
The culture of hospitality allows a high quality level of service, agile service delivery.
India and The Philippines are the most preferred nations for outsourcing ventures:
Time Zone Advantage
Decrease time that products
to reach the market place.
Both India and Ireland saw the opportunities to kick start their economies through outsourcing. The outsourcing of IT and services to India started in the eighties, but it really took off in the mid-nineties due to advances in technology and communications.
Now since outsourcing has spread across the globe, to include Africa, South America, Eastern Europe and the Asia Pacific region, generating prosperity and opportunities for numerous countries and regions. rather than focusing purely on price, more and more organisations are looking for solutions and relationships that add flexibility and strategic value.
In closing the high value outsourcing segment is growing and your business needs an outsourcing partner that can support your organization through the change, expertly helping managers and staff members adjust and manage the transition. When outsourcing ask plenty of questions to ensure potential providers understand the many challenges (staff, technical and operational) that come with outsourcing and offer creative, proven ways to alleviate stress on your organization.
“the strategic use of outside resources to perform activities traditionally handled by internal staff and resources.”
Outsourcing is defined as :
What are the different types of outsourcing services:
In American outsourcing dates back to roughly the 1800s when Clipper ship sales were manufactured in Scotland. These sails had to be fashioned according to exact specifications and effectiveness was required for distant journeys. This would have been transported by boat. Difficulties plummeted once technology and modes of transport changed, today its likely to see outsourcing everywhere because of how easy and convenient it can be.
There are four types of outsourcing
Co-Sourcing is a business practice where a service is performed by staff from inside an organization and also by an external service provider
Offshoring or Offshore Outsourcing
Nearshoring, Crowdsoursing, Multisourcing.
Similar processing and Improvement
In the early days, cost or headcount reduction were the most commons to outsource.
In today’s world, both large and small companies do not have the capacity or expertise to manufacture every component of an end product getting ready for sale.
They main key of outsourcing is choosing the resource that can provide the quality product or service
Outsourcing Solving Problems
Gain access to world class capabilities
Free internal resources for other purposes
Insufficient resources are available internally
Share risks with a partner company
Additional common reasons to outsource
Why do companies outsource?
Reduced and control operating costs
Improved company focus getting more profit
Lower operational and labor cost are among the primary reasons why companies choose to outsource.
Purpose of Outsourcing
Purpose of Outsourcing
The most commonly outsourced streams of business include:
Web Design and Maintenance
Companies primarily outsource to avoid certain costs - such as peripheral or "non-core" business expenses, high taxes, high energy costs, excessive government regulation/mandates, production and/or labor costs.