About Outsourcing

By Mandvi Danayak
PGDM- 17
Section- B
 What Is Outsourcing
• Outsourcing is the business practice of
hiring a party outside a company to
perform services and create goods that
are traditionally produced in house by the
company’s own employess and staff.
• It is usually adopted by the company as a
cost cutting measure
 Effects of Outsourcing
• It increases the revenue
• It improves work life balance
• Improves company focus
• Freeing internal resources for other
purpose
• Efficient for time consuming functions
 Pros Of Outsourcing
• Higher return on investment
• Improved efficiency
• Increased speed of delivery
• Ease of employment handling
• Lower labor cost
• Optimizes resource utilization
• Increases focus
 Con’s Of Outsourcing
• Loss of control over business processes
• Concerns on privacy
• Quality issues
• Communication issues
• Lack of control
• Shortcoming in performance
 Example of Outsourcing
• Outsourcing’s biggest advantages are time
and cost saving. A manufacture of personal
computers might buy internal components
for its machines from other companies to
save on production cost. A law firm might
store and back up its files using a cloud-
computing service provider, thus giving it
access to digital technology without
investing large amounts of money to
actually own the technology.
 Criticism of outsourcing
• Outsourcing does have disadvantages.
Signing contracts with other companies
may take time and extra effort from a firm’s
legal team. Security threats occur if another
party has access to a company’s
confidential information and then that party
suffers a data breach. A lack of
communication between the company and
the outsourced provider may occur, which
could delay the completion of projects.
 Conclusion
• Outsourcing is a vital part of a business’s
decision. There are various factors that
plays an important part in this decision,
such as quality, cost and other factors.
Many companies depend on outsourcing
to help their business to become more
productive and successful
 Bibliography
• Gurubaxani,V.(1996). “The New World of
Information Technology Outsourcing,”
Communications of the
ACM,Vol.39,No.7,July,pp.45-46.
• Lacity, M.C. and R.Hirschheim (1993).
Information Outsourcing: Myths,
Metaphors and Realities, John Wiley
&Sons, Chichester, UK.
Thank you