Impact, Prospects And Problems of

Outsourcing

Presented By:-
Akhilesh Jha (2010MT0066)
Shyam Sundar Mishra(2010MT0037)
 Introduction
 Different concepts of outsourcing in SCM
 Prospects of Outsourcing
 Problems of Outsourcing
 Impacts of Outsourcing
 Conclusion
A precise definition of outsourcing has yet to be agreed upon. Thus, the
term is used inconsistently. However, outsourcing is often viewed as
involving the contracting out of a business function - commonly one
previously performed in-house - to an external provider. In this sense, two
organizations may enter into a contractual agreement involving an
exchange of services and payments. Of recent concern is the ability of
businesses to outsource to suppliers outside the nation, sometimes referred
to as off shoring or offshore outsourcing (which are odd terms because
doing business with another country does not mean you have to go
offshore.)
If a company outsources, it pays to have part of its work done by
another company.

Outsourcing, in literal terms, means sourcing from outside.

Outsourcing is contracting with another company or person to do

a particular function.

The use and handling of personal information by a third party

that performs a business function for the entity.
Outsourcing involves an organization passing the provision of a
service or the execution of a task previously undertaken in-house to
a third party to perform on its behalf.

outsource - obtain goods or services from an outside supplier; to

contract work out; "Many companies outsource and hire
consultants in order to maintain a flexible workforce"
 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
 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
Unmanaged change causes a severe performance gap during the outsourcing

implementation and results in expected performance not being reached