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Dec 12: Planning > Ch. 13 Outsourcing, 7 q's on exam > Flashcards

Ch. 13 Outsourcing, 7 q's on exam Flashcards

1
Q

Outsourcing definition

A

a contractual relationship for the provision of business services by an external provider

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2
Q

_____ firms are more likely to outsource all HR functions opposed to _____ firms who retain the critical components

A

small, large

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3
Q

Core competencies definition

A

resources and capabilities that serve as a firms competitive advantage, distinguishes a company competitively and reflects its personality.

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4
Q

HRoffshoring definition

A

HR activities are being outsourced to other countries in order to lower costs/improve quality

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5
Q

Request for proposal definition

A

describes the responsibilities to be outsourced and invites potential providers to present their proposal for carrying out the job.

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6
Q

Activities that are most likely to be outsourced because they are … ?

A
  • Rule based
    • Repetitive
    • Frequently undertaken
    • Predictable
    • Able to be fully/partly automated by technology
    • Able to be delivered by remote sites
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7
Q

Hr functions most likely to be outsourced:

A
  • Temporary staffing
    • Payroll
    • Training
    • Recruiting
    • Benefits administration
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8
Q

Compensation activities that are outsourced

A
  • Payroll
    • Benefits
    • Compensation
    • Pension
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9
Q

R & S activities that are outsourced

A
  • Advertisements
    • Screening of applications
    • Testing
    • Reference checking
    • Preliminary interviews
    • Executive salary negotiations
    • Exit interviews
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10
Q

Training activities that are outsourced

A
  • Program delivery
    • Program design/development
    • Training consulting
    • Training needs analysis
    • Program evaluation
    • Strategic planning
    • Administration
    • Training policies
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11
Q

Health and Safety that are outsourced

A
  • Employee assistance programs

* Wellness programs

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12
Q

Legal service activities that are outsourced

A
  • Contracts
    • Terminations
    • Non-compete ag.
    • NDA’s
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13
Q

6 major reasons for Outsourcing

A
  1. Financial savings
    1. Strategic focus
    2. Access to advanced technology
    3. Improved service levels
    4. Access to specialized expertise
    5. Organizational politics
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14
Q

Reason to outsource: Financial savings,

why ?

A
  • Economic of scale from specialized outsourcers who are more efficient
    • Cost control
    • Decreased capital commitments
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15
Q

Reason to outsource: Strategic focus,

why ?

A
  • Decide to focus on specific core competencies ex. Customer service, innovation
    • Core work is transformational and adds value to employee/customers
    • Move secondary functions to firms that do it well
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16
Q

Reason to outsource:Access to Advanced Technology,

why ?

A
  • It is the main driver for outsourcing
    • If a company cannot find technical talent, and/or need quick reliable access to technology
    • enables a company to reduce transaction time
17
Q

Reason to outsource:Access to specialized expertise,

why ?

A
  • Experts understand the complex law and regulations required in HR
    • Reduces the risk and liabilities
    • Access to best practices
18
Q

Reason to outsource:Organizational politics,

why ?

A
  • Outsourced function is not as visible as in house department performing the same tasks
    • Outsource get rid of a troublesome department (ee’s who are underperforming)
    • Reduces head count
19
Q

Risk and Limitations; some questions to be considered:

4

A
  • Are the anticipated benefits realized ?
    • What are the risks to service levels ?
    • What is the effect on employee morale ?
    • Does outsourcing reduce the value of the organization ?
20
Q

areas of Risk and limitations of outsourcing

A
  • The actual benefits
    • Service risks
    • Employee morale
    • Security risks
    • Reduced value
21
Q

Project benefits vs. The actual benefits of outsourcing

A
  • Not as cost effective and problem free as expected

* Incompatible systems and client demands are the reason for excessive costs

22
Q

____ % found that it was more expensive to outsource

A

50

23
Q

___ % of outsourcing contracts are not renewed

A

30

24
Q

Service risks

A
  • Contractual arrangements dictate which services will be provided
    • Flexibility is compromised to add new features or change service levels
    • Disruption of service could pose challenges from potential labour relations problems with outsourced organization
25
Q

Employee morale

risks

A

• restructuring can create displaced, resentful, alienated, and anxious employees

Potential backlash

26
Q

1/3 of HR professionals resist outsourcing because they worry about
…?

A

○ Losing their jobs
○ Being forced to work for a vendor
○ Fear that management believes outsiders are more competent

27
Q

reduced value risks

A
  • Extreme levels of outsourcing hollow out a company
  • An organization experiences a reduced capacity to generate profits or innovate
  • The internal image of HR functions ultimately are brought back in house
28
Q

Management of Outsourcing: how will outsourcing be managed?

A
  • Selecting the vendor
  • Negotiating the contract
  • Monitoring the arrangement
29
Q

Tasks that need to be done when Selecting a vendor

A
  1. Select an organization
    1. Inform staff of the affected function
    2. Prepare a request for proposal
    3. Invite internal/external bids
    4. Establish a team to evaluate these bids
30
Q

Tasks that need to be done when negotiating the contract

A

• Customize and negotiate outsourcing contract
• Set performance standards, penalties clauses
• Establish benchmarks for service expectations
○ Response time
○ Response cost
○ Customer satisfaction ratings

31
Q

Tasks that need to be done when monitoring the arrangement

A
  • Establish a relationship to ensure outsourcers act in the best interest of the org. and has knowledge of the org
  • Check references of outsourcing company
  • Demand frequent/accurate reporting
  • Conduct internal/external satisfaction surveys
32
Q

Most frequent causes of outsourcing problems

A
  • Poor service definition

* Weak management processes

Dec 12: Planning (5 decks)

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