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BUILDING A BETTER BUSINESS WITH OUTSOURCING
PRESENTORSNITESH KHATIWADA
ROSHAN PANTSONI SAHANI
ADITYA KUMAR JHASANGITA LAMA
Presented toDr. Dhruba Lal Pandey
Nepal Commerce Campus
Minbhawan; Kathmandu
Nancy Mann Jackson;Growth Strategy, Entrepreneur
2015
PRESENTATION OVERVIEW(OBJECTIVES OF THE ARTICLE ANALYZED)
o INTRODUCTIONo VARIABLES DISCUSSEDo WHAT ARE OUTSOURCED?o DECIDING WHETHER TO OUTSOURCE?o PROS AND CONS WITH OUTSOURCING?o FINDINGSo CONCLUSION
Outsourcing
What is Outsourcing?• Outsourcing is a strategic decision to give a task or
activity to an independent contractor who determines how best to do the task or activity.
• The firm and the independent contractor become partners and may establish a long-term relationship.
• Examples of outsourced activities: IT, HR, Legal services, Manufacturing, R and D.
• Note:not just manufacturing but many more are outsourced today
Sourcing Decisions
• Single sourcing:Choosing a single supplier
• Multiple sourcing:Choosing several qualified suppliers
• Cross sourcing A sourcing strategy in which the company uses a single supplier for a
certain part or service in one area of business, and another supplier with the same capabilities for the similar part or service in another area of business.
Coming to the Article
• Most entrepreneur despite having potentiality fails sometime for many reasons
• One of them is that they can’t devote time in all aspects of organizational work
• So the trend of outsourcing has increased
• Workload are being shifted and managers can focus on core task of business
• Important aspect is “what is to be outsourced” and “when to outsource?”
• Fruitful result are achieved on matching between what the business wants and what the provider specialize in
VARIABLES DISCUSSED
• Locus of Specialization (What to outsource?)• When to outsource?• Finding the right contractors• Control over Work Performed (How to make
Contractors work?)• Costs of Activity (How to count the cost?)• Quality of Work (Challenges of Outsourcing)• Reaping the Benefits
When to Outsource
• Right time differs as per business• New projects• Employees can’t handle day-to-day
business• Further growth of business
Deciding Whether to outsource?(OUTSOURCING CONSIDERATION)
• These days any task can be
outsourced
• Sometimes there are things you
don’t want to do but they are
important for your core business
• Don’t outsource that you don’t
want to do it
• Come to a decision – What is core to the business and the future
of business?– What can bring competitive advantage?
• Decide what to outsource– (MAY BE)Highly skilled or executive,
expertise– Highly repetitive tasks– Specialized knowledge
Deciding Whether to outsource?(OUTSOURCING CONSIDERATION)
Deciding Whether to outsource? Contd……………………
• Find the right contractors – Reliable outsource provider– Your own network– Online networks– Placing ads– Request for proposal– Professional association or trade group– Virtual market places
Deciding Whether to outsource? Contd……………………
• Choose a partner(contractors)• Make a match between what the
business wants and what the provider specialize in
• Use incentive to motivate the outsourcer to focus on what is most important to you
• Lay out requirement and expectations in the beginning
Pros and cons With Outsourcing
PROS• Lower labor costs• Low investment risk• On - demand talent: product development
and management skills available if not found in-house
• Time-to-market improvement: Products can be launched closer to the point of consumption
• Introduction of new and legacy products in new markets is more efficient, because of local familiarity with the market.
Pros and Cons With Outsourcing
CONS Potential security problems Identifying qualified and reliable suppliers Disruption of supplies Low product quality Difficulty in protecting confidentiality Provider may not understand business environment Too dependent on service provider
FINDINGS
Source: http://www.statista.com/topics/2257/business-process-outsourcing-industry-worldwide/
FindingsSource:
FindingSource:
CONCLUSION
• Vendor’s service offering are evolving• Demand for more value by customer
to vendors• More concentration on multi-vendors
management• Will be influenced by Global Economic
Condition• Continued growth in the industry
Thank You!