Report on contemporary

issues in management

Submitted By

Nishant sharma
IIIM,Jaipur
 INTRODUCTION
INTRODUCTION
A Working Definition of Outsourcing

Services
COMPANY OUTSOURCER

Organization Service
Level Level
Agreement Agreement

Outsourcing denotes the continuous

procurement of services from a third
party, making use of highly integrated
processes, organization models and
information systems.
 INTRODUCTION
What is Outsourcing?
A Working Definition of Outsourcing

Outsourcing -
the strategic use of outside resources to perform activities
traditionally handled by internal staff and resources Dave
Griffiths

Why Outsource?
Provide services that are scalable, secure, and efficient,
while improving overall service and reducing costs
Why do Companies Outsource?
 Key areas of outsourcing ?

Information Technology/IT solutions

Call Centers

Finance & Accounting Outsourcing

Procurement Outsourcing

Textiles

Manufacturing

Human resource Management

outsourcing
 Advantages of outsourcing

Cost Skilled Time zone

Effective Expertise difference

Increased
Focus on core Distribution of
productivity
competencies risk
and Efficiency

Improving Better
Access to
customer people
world-class
service management solutions
 Disadvantages of outsourcing

Loss Of Threat to
Hidden Security and
Managerial
Costs Confidentiality
Control

Tied to the
Quality Bad Publicity
Financial Well-
Problems Being of Another and Ill-Will
Company

lose talent
Lack of
inside within Linguistic
customer
your barriers
focus
company
 Problems with outsourcing

Loss of Control
Increased cash outflow
Confidentiality and security
Selection of supplier
Too dependent on service provider
Loss of staff or moral problems
Time consuming
Provider may not understand business environment
Provider slow to react to changes in strategy
 Types of outsourcing

Business process outsourcing (BPO)

BPO is a subset of outsourcing that involves the contracting of

the operations and responsibilities of specific business functions
or processes to a third-party service provider.
 Types of outsourcing

Knowledge process outsourcing (KPO)

KPO describes the outsourcing of core business activities, which often are
competitively important or form an integral part of a company's value
chain. Therefore KPO requires advanced analytical and technical skills as
well as a high degree of proprietary domain expertise
 Types of outsourcing

Legal process outsourcing (LPO)

LPO refers to the practice of a law firm or corporation obtaining legal

support services from an outside law firm or legal support services
company. This process has been marked by the practice of outsourcing
any activity except those where personal presence or contact is
required.
 Types of outsourcing

Recruitment process outsourcing (RPO)

Recruitment Process Outsourcing is a form of business

process outsourcing (BPO) where an employer outsources or
transfers all or part of its recruitment activities to an
external service provider.
 Types of outsourcing

Engineering process outsourcing( EPO)

EPO offers global consulting and outsourcing services

providing end-to-end services in the areas of Engineering and
Technical Process Outsourcing.
1970s to early 1990s 1994 to 1998 1999 to 2001
2001 to
present
Figure 1: How will the outsourcing market develop?
 40% to 50% of the top 500 companies in the world is leveraging
on outsourcing for most of their business processes.

current figures values this robust industry to a staggering $20

billion USD.

On an average global outsourced projects involve about 28% that

belong to the hardcore IT sector, 11% to finance sector, 15% to sales
and marketing and 9% from administrative sector. The remaining 22%
belong to many other different sectors such as consumer distress
calls, general data segregation jobs, tourism etc.