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Ally Puzas, CEOErica Taylor, CFO
BuckleUpBaby is a custom basket business, located in the heart of
downtown Portland. They are fairly new and have recently been experiencing tremendous growth
and are looking at expanding their business to meet growing customer
needs. They currently employ 25 full-time workers and they have hired Zadel Information Systems to consult possible
means for their expansion and improvement through IT outsourcing.
1. Their main concern is if they should outsource internationally or domestically. Which would be the most cost effective?
2. Another concern is whether they should outsource all of their order production and tracking information, part of it, or simply one or the other.
3. They feel that customer satisfaction is their number one priority, and in order to handle their clients in the most efficient manner, they would like to know if they should keep all of their customer phone calls within the company, or if outsourcing these components would be beneficial as well.
4. What kind of IT Outsourcing services would be of greatest benefit to their company.
5. Lastly, if they use IT Outsourcing, will it be
more costly for the company than if they did everything internally.
According to the Information Technology Association of America, IT is…
“The study, design, development, implementation, support or
management of computer-based information systems, particularly
software applications and computer hardware”
Outsourcing is subcontracting a process, such as product design or manufacturing, to a third-party company.
The decision to outsource is often made in the interest of lowering firm costs, redirecting or conserving energy directed at the competencies of a particular business, or to make more efficient use of labor, capital, technology and resources.
Wikipedia Definition
Benefits of Outsourcing:1. Reduce overheads, free up resource2. Improve company focus on its core
competencies and strategic imperatives3. Re-allocate internal resources to higher-
value purposes4. Get access to specialized skill5. Address the issue of limited internal
resources6. Improve speed and service7. Manage more effectively problematic
functions
When choosing to outsource domestically or internationally, a company’s focus
should be on finding a balance between cost, performance, and risk objectives
There are benefits of both international and domestic outsourcing, as well as
drawbacks. Depending on a company’s needs, one is often better suited than
the other
1. Culture: Colloquialisms, language and life experience
2. Convenience: Location and travel-time3. Cost: Overall cost 4. Complexity: Needs of the company 5. Customer Satisfaction: Fulfilling
expectations of customers and their experience with the organization
Domestic (Onshore) Outsourcing:Processes which are highly manual and
error-prone Benefits:1. Decreased travel, communication costs2. Time zone differences are irrelevant3. Close, trusting relationship can be
formed at a fast pace4. Greater customer assurance from
dealing with domestic provider
Drawbacks:1. Hourly rate is generally higher2. Management and control problems
may arise3. Information exposure to third party is
of a greater concern
International (Offshore) Outsourcing:Processes which are clearly defined and
consistent among cultures
Benefits:1. Increases IT staffing flexibility2. Cost savings may be realized3. Time-to-market and competitive
advantage4. Greater technological agility
Drawbacks:1. Indirect costs may be higher due to
long-distance communication, training, and travel
2. International and political risk associated with transfer of internal customer data
3. Risk of displaced intellectual property
“Customer Satisfaction is our #1 concern.” -
BuckleUpBaby, Inc.Outsourcing Suggestions:1. Core competencies should be kept in-
house2. Web-design and maintenance3. Business Processes4. Payroll, accounting and logistics In-house Recommendations:1. Assembly of products 2. Call Center Services
• Specializing in Small and Medium Business Services
• Business Process Outsourcing (BPO)• Book Keeping/Accounting
• Tracking Information• Operations• Consulting
Business Process Outsourcing Services
• GMR International and Domestic Services:
• Offering complete internet solutions• Custom website design and
maintenance services• Profit-oriented ecommerce website
Website Maintenance Outsourcing
• IT Specialist Services• Custom Web Development• Strategic Development• Integrated Tracking
GateSix: Everything ITResource Type Specific Pricing
• Database Design and Programming• Microsoft Certified Partner
• XML Technology• Custom Software Development
Database Development and Design
• Think of the company you outsource to as a business partner
• Identify all core competencies and choose which processes will be outsourced
• Allow for customer feedback and suggestions about new processes
• Maintain customer confidentiality within the company while serving clients in the most efficient way