What and Why Should be Outsourced

Because many businesses in the US have more often began outsourcing different business products instead of doing them in-house, it is important to understand why outsourcing may be the best option. Although many tie outsourcing to foreign markets, outsourcing can include both foreign and domestic markets. By entering into a contractual agreement, outsourcing allows organizations to pay for services they need. This gives the option for a business to get professionals to perform services for them that the business may not have the staff for. Outsourcing provides a cost saving-strategy that is usually more affordable. Ultimately,

It is a concept that has evolved from a manufacturing perspective to a strategic perspective, which views the concept as a way for organizations to focus and be more competitive. The basic premise of outsourcing is that a specialist organization can perform a particular service more efficiently than can internal operations because a specialist organization has an inherent advantage in producing and delivering a service. Superior technology, management skills, or economies of scale may contribute to this perception. The type of sourcing relationship depends on whether a long-term or short-term need exists. To save funds used for benefits for regular employees, temporary workers are hired. In this case, the organization (outsourcer) provides all necessary resources except the workers, who are provided by the vendor. For long-term services, the vendor has full responsibility for delivering the service; the outsourcer provides only a liaison.

Outsourcing is a method used by many corporations in which their products are manufactured in foreign countries often for cheaper labor.This method method of productions has it’s pros and cons.

The first and foremost thing to do is to consider before outsourcing is business profitability. Some of the factors to consider regarding this

Outsourcing is when a company purchases products or services from an outside supplier rather than performing the same work within its own facilities, in order to cut costs. In other words, outsourcing is an organization's contractual relationship with a specialized outside service provider for work traditionally done internally by that organization. The decision to outsource is a major strategic one for most companies because it involves weighing the potential cost saving against the consequences of a loss in control over the product or service. Some common examples of outsourcing include manufacturing of components, computer programming services, tax compliance and other accounting functions, as well as payroll and other

Outsourcing is a process of a company obtaining the services from an outside vendor. These services can be of different forms like IT services for a software company, voice services for a customer support industry, legal services for companies and small part suppliers for manufacturing companies etc. The main reason for a company to outsource its services is cost savings

Outsourcing is the process of hiring functional experts to handle business units that are outside the main activity of the business of the company. Organizations use outsourcing every day to improve the products and services they provide customers.

The origins of many outsourcing endeavors begin as part of a strategic planning session during a period of lean years for a company or anticipation of a prolonged impending down-cycle. This is a time-period when the organization does not have a viable competitive product to offer in the market or the

(Greaver, 1999) proclaims that outsourcing is of a strategic nature and that the decision-making process of a company should take this into account. He then goes on to define outsourcing as the act of transferring some of company’s recurring internal activities and decision rights to outside providers, as set forth in a contract. Because the activities are recurring and a contract is used, outsourcing goes beyond use of consultants.

Kamensky and Morales (2006, 45) define outsourcing as a management strategy that contracts out organizational activities to vendors or suppliers who specialize in these activities in order to perform them more efficiently and effectively. Outsourcing is defined as the practice of turning over entire business functions to an outside vendor that can supposedly can perform the specialized tasks better and less expensively than the organization choosing to outsource. Outsourcing differs from privatization in that outsourcing, the work load is shifted from in-house government providers to the private sector, but no transfer or sale of assets has occurred. Outsourcing needs the government to remain fully responsible for the provision of all services and management decisions. Other transactions include direct vendor delivery, hiring long term trained staff, etc.

Outsourcing is a long-term, result-oriented business relationship with a specialized service provider. Outsourcing is easily defined as the execution of a business process to an external service provider.

A common definition of outsourcing is the takes part of their business and give it to another company to complete. The main industries that take

Outsourcing refers to hiring an outside, independent firm to perform a business function that internal employees might otherwise perform. Many organizations outsource jobs to specialized service companies, which frequently operate abroad. The outsourcing trend stands to continue; the latest wave of outsourcing impacts the information technology field. IT outsourcing includes data center operations, desktop and help desk support, software development, e-commerce outsourcing, software applications services, network operations and disaster recovery.2

Because of the important relationship between insourcing/outsourcing and competitiveness, organizations must consider many variables when considering an insourcing/outsourcing decision. This may include a detailed examination of a firm’s competency and costs, along with quality, delivery, technology, responsiveness, and continuous improvement requirements. Because of

Chamberland (2003), also points out that outsourcing’s transfer of ownership to the service provider differentiates it from other business relationships. In other business agreements, if an organization still retains its processes, then the organization is purchasing time which is a services relationship. However, if the contracted service provider owns and controls the processes, then the organization is outsourcing. For example, a manufacturing company that hires an outside IT company to help repair and maintain its computer system is not outsourcing. On the other hand, a manufacturing company that transfers some of its business processes to an outside service provider that will provide customer service and Human resource management services back to the company for some years is outsourcing.