Group items tagged

Outsourcing is the act of one company contracting with another company to provide services that might otherwise be performed by in-house employees.

There are many reasons that companies outsource various jobs, but the most prominent advantage seems to be the fact that it often saves money.

So, what is outsourcing? Outsourcing is contracting with another company or person to do a particular function. Almost every organization outsources in some way. Typically, the function being outsourced is considered non-core to the business. An insurance company, for example, might outsource its janitorial and landscaping operations to firms that specialize in those types of work since they are not related to insurance or strategic to the business. The outside firms that are providing the outsourcing services are third-party providers, or as they are more commonly called, service providers.Although outsourcing has been around as long as work specialization has existed, in recent history, companies began employing the outsourcing model to carry out narrow functions, such as payroll, billing and data entry. Those processes could be done more efficiently, and therefore more cost-effectively, by other companies with specialized tools and facilities and specially trained personnel.Currently, outsourcing takes many forms. Organizations still hire service providers to handle distinct business processes, such as benefits management. But some organizations outsource whole operations. The most common forms are information technology outsourcing (ITO) and business process outsourcing (BPO).

Again, inability to find work means inability to purchase homes, spend money, and profit companies

greater desire to outsource to make things more cheaply so they will be more attractive to consumers.

Further, many argue that giving jobs to workers in less developed countries improves those countries economically and increases trade for US products.

When done for the right reasons, outsourcing will actually help your company grow and save money. There are other advantages of outsourcing that go beyond money. Here are the top seven advantages of outsourcing.

Example: A company lands a large contract that will significantly increase the volume of purchasing in a very short period of time; Outsource purchasing.

Many feel that outsourcing is the best way of meeting these challenges. Godbey (1997) argues that "most leisure services will have to figure out what they are good at and 'outsource' everything else" (p. 218).

Outsourcing is also a means of acquiring specialized resources and valuable expertise that cannot be produced internally. Thus leisure services managers are being challenged to rethink the traditional model of organization

Outsourcing may have come in for a lot of flak from anti-outsourcing lobbies in the US, but the fact of the matter is that outsourcing has in fact been the one bailout option that has saved many US companies from going totally bankrupt.

That’s just above 200,000 jobs lost every year to global outsourcing, a trivial problem in the context of the normal churn of the U.S. economy, where about 7 million jobs were gained and lost in each of the previous four quarters”.

Despite the orthodoxy that outsourcing produces financial savings, the outsourcing industry giants can offer little evidence to support their claims. The same is true of the Government departments who suggest outsourcing will generate savings but then can’t identify these supposed savings on any public accounts. We have had the scandal of re-financing in PFI deals and contractors seeking profits with supposed ‘contract variations’ but it is interesting that even in the area of insurance costs the public purse is left with hidden costs as contractors fail to take risks associated with public serviced delivery.

Outsourcing is gaining increased popularity within the education sector, with more and more schools beginning to recognise the benefits it offers. These include the most convenient and viable means of organising payrolls, finances and accounts, all of which will be maintained and updated on time by experienced professionals.  

Steps to successful outsourcingThere are a number of steps schools should follow in order to achieve successful outsourcing.

DALLAS (CBSDFW.COM) - Tens of thousands of American Airlines employees are on edge, waiting to find out if they will lose their jobs. The airline said Wednesday that it needs to cut 13,000 positions in order to survive, and the plan includes outsourcing some maintenance work. For years, American Airlines and its unions bragged that they were the only ones to still do most of their own maintenance. Nick Soldevere has been working as an aircraft maintenance crew chief at DFW International Airport. “We do pride ourselves on our maintenance work,” he said. But that pride has since turned to fear for Soldevere and thousands of his American Airlines co-workers. “Right now, the level of concern is very high.” After years of doing a majority of its jet maintenance in-house, American Airlines has proposed cutting 4,600 mechanics system-wide, including a complete closure of its heavy maintenance facility at Fort Worth’s Alliance Airport. The airline wants to outsource a portion of that work.

Prior to offshore outsourcing, U.S. employees were shielded against low-wage foreign labor. Americans worked with more capital and better technology, and their higher productivity protected their higher wages. Outsourcing forces Americans to “compete head-to-head with foreign workers” by “undermining U.S. workers’ primary competitive advantage over foreign workers: their physical presence in the U.S.” and “by providing those overseas workers with the same technologies.” The result is a lose-lose situation for American employees, American businesses and the U.S. government. Outsourcing has brought record unemployment in engineering fields and a major drop in university enrollments in technical and scientific disciplines. Even many of the remaining jobs are filled by lower-paid foreigners brought in on H-1b and L-1 visas. American employees are discharged after being forced to train their foreign replacements.

Does port outsourcing improve productivity?

"The productivity of casual employees is often lower than that of permanent core employees of an organisation-in large measure, because use of casual and contract labour removes the incentive for an employer to provide training to those parts of the workforce."

A leading UK based holiday and leisure group was considering outsourcing to help deliver operational efficiencies, and to detect and quickly respond to customer’s needs. Client Challenge Stabilize financial processes and improve financial controls Improve service levels and reduce cost of Finance and Accounting ( F&A), payroll and associated applications management Consider numerous outsourcing options and factors before making the decision. Because the firm’s ability to leverage a global service delivery model was limited, Alsbridge was chosen to guide them through the process.

s more on what matters most: their real business. Headquartered in Norwalk, Conn., Xerox

Xerox offers business process outsourcing and IT outsourcing services, including data processing, healthcare solutions, HR benefits management, finance support, transportation solutions, and customer relationship management services for commercial and government organizations worldwide

No company should get a tax break for outsourcing jobs. Instead, tax breaks should go to manufacturers who set up shop here at home. Bigger tax breaks should go to high-tech manufacturers who create the jobs of the future

The Indian IT sector, which gets 60 per cent of its export revenue from the US, has come out strongly against US moves to stop outsourcing.

"Meanwhile, America is more productive than ever. And companies like Boeing are realising that even when we can't make things cheaper than China, we can make things better. That's how we're going to compete globally," Obama said. Obama said Boeing's business right now is booming. Last year, orders for commercial aircraft rose by more than 50 per cent.