FINALS Flashcards
(52 cards)
T/F
The model for most of the 20th century was a large integrated company that can “own, manage, and directly control” its assets.To increase flexibility and creativity, many large companies developed a new strategy of focusing on their core business, which required identifying critical processes and deciding which could be outsourced.
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T/F
Most organizations were not totally self-sufficient; they outsourced those functions for which they had no competency internally. The current stage in the evolution of outsourcing is the development of strategic partnerships.
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“the strategic use of outside resources to perform activities traditionally handled by internal staff and resources”
Outsourcing
Outsourcing known also as “___________”, outsourcing is a strategy by which an organization contracts out major functions to specialized and efficient service providers, who become valued business partners.
facilities management
T/F
the difference between simply supplementing resources by “subcontracting” and actual outsourcing, is that the latter involves substantial restructuring of particular business activities including, often, the transfer of staff from a host company to a specialist, usually smaller, company with the required core competencies.
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Common reasons companies outsource
- Reduce and control operating costs
- Improve host company focus
- Gain access to world-class capabilities
- Free internal resources for other purposes
- A function is time-consuming to manage or is out of control
- Insufficient resources are available internally
- Share risks with a partner company.
In earlier periods, ___________________ were the most common reasons to outsource. In today’s world the drivers are often more strategic, and focus on carrying out core value-adding activities in-house where an organization can best utilize its own core competencies
cost or headcount reduction
Factors influencing successful outsourcing:
- Understanding company goals and objectives
- A strategic vision and plan
- Selecting the right vendor
- On-going management of the relationships
- A properly structured contract
- Open communication with affected individual/groups
- Senior executive support and involvement
- Careful attention to personnel issues
- Short-term financial justification
Enumerate the Outsourcing process
- Program Initiation
- Service Implementation
- Final Agreement
- Program Closure
Covers the activities required to take these ideas and intentions and develop them into a formal, planned outsourcing program and to make the transition to the final outsourced service. Activities are:
* Defining the transition project
* Transferring staff
* Defining the service level agreements (SLA)
* Defining service reporting
* Implementing and handling over the service
*Implementing service management procedures
Service Implementation
Concerned with taking these ideas (variety of ideas and opinions about the purpose and scope of the program, what the final result of the program will be, and how the program will be carried out) and intentions and documenting them to form the basis of the draft contract.
Program Initiation
refers to the Completion of the negotiation cycle
Final Agreement
To gain maximum benefit, program should go through a formal close down
Information generated during the life of the program, and this will have been stored with varying degrees of formality by the team members.
Program Closure
T/F
Outsourcing allows organizations to be more efficient, flexible, and effective, while often reducing costs.
T
advantages of outsourcing
- Staffing flexibility
- Acceleration of projects and quicker time to market
*High calibre professionals that hit the ground running
*Ability to tap into best practices - Knowledge transfer to permanent staff
*Cost-effective and predictable expenditures - Access to the flexibility and creativity of experienced problem solvers
- Resource and core competency focus
Different types of Outsourcing
- Business Process Outsourcing(BPO)
- Professional Outsourcing
- IT outsourcing
- Multi-sourcing
- Manufacturer Outsourcing
the engagement of services from a third-party provider. It uses various technology-enabled services to hasten the delivery of services
activities could be back-office such as, but not limited to, payroll, accounting, human resources, or front office jobs like customer service, sales, and marketing, etc. In the case of content providers, these business activities could mean hiring writers, remote editors, or virtual assistants
speeds up processes and enhances efficiency. It helps companies divert their resources to more critical business strategies
Business Process Outsourcing(BPO)
Benefits of BPO
Cost saving
Global market –access bigger employment pool
Global presence – operational across the globe increases trade opportunities.
Flexible workforce – reduces internal local labor and employment compliance obligations.
Leverage skill – leveraging the skill of other specialist companies
Focus – enables the client company to focus on their core functions
Can be a viable option when tasks are too complex for entrepreneurs or their small team.
Professional Outsourcing
It pertains to contracting technology-related services and resources for a part or the entirety of an information technology business function.Every business, whether it is a start-up or a large corporation, has IT needs as it deals with technology on a certain level.
IT outsourcing
combines outsourcing output from dedicated specialised companies and they then aggregate external service providers to create a finished product
can be applied to any business area but is most common in sectors of high specialism and/or complexity.Areas such as technology, avionics, car industry, and space travel all heavily rely on multi-sourcing
forms the best-of-breed teams to achieve business goals. It operates in a manner where the business creates a partner relationship with other providers and is outcome-focused.
This type of outsourcing mostly requires a business to have a comprehensive strategy and a network of governance and relationships.
Multi-sourcing
Can significantly reduce costs on infrastructure, equipment, as well as labour.
Manufacturer Outsourcing
Advantage of outsourcing
- Swiftness and expertise – tasked are outsourced who specialize in the field.
- Concentrating on core process rather than the supporting ones – strengthen core business processes
- Risk Sharing – shift certain responsibilities to the outsourced vendors
- Reduced operational and recruitment costs – eludes the need to hire individuals in-house
Disadvantages of outsourcing
- Risk of exposing confidential data – risk of exposing confidential company information to a third party
- Synchronizing the deliverables – stretched delivery time frames, substandard quality output and inappropriate categorization of responsibilities.
- Hidden costs – signing a contract while signing a contract across international boundaries may pose a serious threat.
- Lack of customer focus – vendor may lack complete focus on organization’s tasks
