0 penilaian0% menganggap dokumen ini bermanfaat (0 suara)
138 tayangan5 halaman
The document analyzes the major drivers and risks of outsourcing. It finds that the top three drivers are cutting costs, meeting increased market demand that exceeds internal capacity, and improving insufficient internal performance. A survey showed that managers most often outsource due to capacity constraints rather than cost savings. The major risks include potential declines in quality, customer satisfaction, on-time delivery and budget achievement due to issues with outsourced partners.
Deskripsi Asli:
Paper describing the drivers and risks of outsourcing.
The document analyzes the major drivers and risks of outsourcing. It finds that the top three drivers are cutting costs, meeting increased market demand that exceeds internal capacity, and improving insufficient internal performance. A survey showed that managers most often outsource due to capacity constraints rather than cost savings. The major risks include potential declines in quality, customer satisfaction, on-time delivery and budget achievement due to issues with outsourced partners.
The document analyzes the major drivers and risks of outsourcing. It finds that the top three drivers are cutting costs, meeting increased market demand that exceeds internal capacity, and improving insufficient internal performance. A survey showed that managers most often outsource due to capacity constraints rather than cost savings. The major risks include potential declines in quality, customer satisfaction, on-time delivery and budget achievement due to issues with outsourced partners.
The purpose of the study is to discover the major drivers and risks of outsourcing by different business and government entities. What are the major driving factors and risks associated with the determination to outsource an internal product, process or service? Hypotheses; Ho: major drivers of outsourcing = cost, market demand and internal insufficiency. Ha: major drivers of outsourcing cost, market demand and internal insufficiency. Outsourcing is a general term that has been mainly used in offshore outsourcing. The term has also been widely used in the current business world to obtain an outside source to perform work currently performed in-house. About three-quarters of U.S. companies began outsourcing their information technology in the year 2004 and the trend has been on the rise over the past several years. The process of outsourcing involves not only the determination of when to outsource, but it also holds many risks. To promote a better understanding of the risks related to outsourcing, different scholars have carried out multiple surveys to come up with risks related to this process, and more so, drivers that force businesses and government enterprises to outsource their human resources. From the different literatures reviewed, it is evident that the areas organizations focused on are mostly executive, operations management, supply chain management and procurement communities (Dekkers, 2011). Drivers of Outsourcing Of the different surveys conducted, it was found that the major causes of outsourcing fall into three major categories. First is when a company tries to cut costs or internal headcount. The second case is seen as a result of increased market demand constraining internal capacity. Thirdly, the situation could occur in the case where internal manufacturing or service performance is insufficient or does not meet the requisites. From the survey conducted, and that which can be seen in Figure 1 below, managers selected constrained capacity instead of cutting down on costs as the major driver for reviews. On the other hand, the subordinate may be DRIVERS AND RISKS OF OUTSOURCING 3
assuming that outsourcing could be as a result of cost going out of line. For management to reduce the resistance from the employees, the best method would be to deliberately communicate the importance and objectives of each outsourcing program or activity (Fill & Visser, 2000).
Source: OKeeffe, P. & Vanlandingham, S. (2004)
The Decision Making To determine the item or task to be outsourced from the survey, consideration should be made on the following four items, as seen in Figure 2.
Source: OKeeffe, P. & Vanlandingham, S. (2004)
Cost of Internal vs. External: These factors have to be taken into consideration, especially when making decisions on outsourcing. However, it is usually impossible to DRIVERS AND RISKS OF OUTSOURCING 4
understand the resources to be outsourced, and many organizations will always struggle before they reach an agreement. Due to these unknown activities, the cost of production or the cost of the end product will always be affected. Total costs should be well worked out as they usually lead sub-costs indirectly in relation to the functions of outsourcing. From the survey, the cost of internal vs. external was rated very vital by all groupings, apart from the top management. This is in line with the outsourcings top drivers in that it is top management always viewing outsourcing as a way to attain its objectives and goals.
Source: OKeeffe, P. & Vanlandingham, S. (2004)
Risks of Outsourcing Despite the fact that outsourcing is proven to be effective, it has some drawbacks which must be recognized and effectively managed. It is worth noting that in outsourcing, an outsider dependent on the company will have to perform designated business functions which, if it is not properly managed, will affect business operations or customer relations. Some of the negative impacts include the decline in on-time delivery outcome and end customer satisfaction as a result of delays on the part of outsourced material or tasks. Also, the quality of the product or service may have a tendency to decline, which in turn affects customer satisfaction. There is also the issue that budgets may not be achieved due to poor allocation and planning of resources (Broedner, Kinkel & Lay, 2009). Lastly, there may also be the issue of supply interruption due to inadequate finance by the providers. DRIVERS AND RISKS OF OUTSOURCING 5
References Broedner, P., Kinkel, S., & Lay, G. (2009). Productivity effects of outsourcing. International Journal of Operations & Production Management, 29(2), 127-150. Retrieved from http://dx.doi.org/10.1108/01443570910932020 Dekkers, R. (2011). Impact of strategic decision making for outsourcing on managing manufacturing. International Journal of Operations & Production Management, 31(9), 935-965. Retrieved from http://dx.doi.org/10.1108/01443571111165839 Fill, C., & Visser, E. (2000). The outsourcing dilemma: A composite approach to the make or buy decision. Management Decision, 38(1), 43-50. Retrieved from http://search.proquest.com.proxy.davenport.edu/docview/212061448?accountid=40195 OKeeffe, P. & Vanlandingham, S. (2004). Managing the risks of outsourcing: a survey of current practices and their effectiveness. Protiviti. Retrieved from http://www.protiviti.com/en-US/Documents/Surveys/ManagingOutsourcingRisks.pdf
How to Read People: The Complete Psychology Guide to Analyzing People, Reading Body Language, and Persuading, Manipulating and Understanding How to Influence Human Behavior
Summary: Dotcom Secrets: The Underground Playbook for Growing Your Company Online with Sales Funnels by Russell Brunson: Key Takeaways, Summary & Analysis Included