OUTSOURCIN

G
MEANNG
 Another firm’s employees carrying out tasks
previously performed by one’s own employees”.
• Outsourcing is a practice in which an individual or
company performs tasks, provides services or
manufactures products for another company
functions that could have been or is usually done in-
house.
• Outsourcing is typically used by companies to save
costs.
DEFINITION
  “The strategic use of outside resources to perform
activities traditionally handled by internal staff and
resources” Dave Griffiths
Why Outsource?
 Reduce costs
 Focus on core
 Improve quality
 Increase speed to market
 Conserve capital
 Foster innovation
Key areas of outsourcing 
 •Information Technology/IT solutions
 •Call Centres
 •Finance & Accounting Outsourcing
 •Procurement Outsourcing
 •Textiles
 •Manufacturing
 • Human resource Management
Advantages
 Cost effective
 Skilled expertise
 Focus on core competencies
 Improving customer service
 Increased productivity and efficiency
 Better people mgt
 Distribution of risk
 Access to world-class solutions
Disadvantages
 Loss of managerial control
 Quality problems
 Lack of customer focus
 Hidden costs
 Tied to the financial wellbeing of another company
 Loss of talent within your co.
 Threat of security and confidentiality
 Bad publicity and ill-will
 Linguistic barriers
Problems with outsourcing
• 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
Outsourcing to India
 Vast Talent Pool
 Cost Savings
 Easy Communication
 World-class IT Infrastructure and Latest Technology
 Stable Government and Supportive Policies
 Round the Clock Productivity
 Committed and Hard-working Professionals
 Consistent High-Quality Services
 Faster Project Delivery
 More Time To Focus On Core Business
Types of ousourcing
 Business process outsourcing (BPO)
BPO is a subset of outsourcing that involves the
contracting of the operations and responsibilities of
specific business functions or processes to a third-
party service provider.
Knowledge process outsourcing
(KPO)
 KPO describes the outsourcing of core business
activities, which often are competitively important
or form an integral part of a company’s value
chain. Therefore KPO requires advanced analytical
and technical skills as well as a high degree of
proprietary domain expertise.
Legal process outsourcing (LPO)
 LPO refers to the practice of a law firm or
corporation obtaining legal support services from
an outside law firm or legal support services
company. This process has been marked by the
practice of outsourcing any activity except those
where personal presence or contact is required.
Recruitment process outsourcing
(RPO)
 Recruitment Process Outsourcing is a form of
business process outsourcing (BPO) where an
employer outsources or transfers all or part of its
recruitment activities to an external service
provider.
Engineering process
outsourcing( EPO)
 EPO offers global consulting and outsourcing
services providing end-to-end services in the areas
of Engineering and Technical Process
Outsourcing.
• 40% to 50% of the top 500 companies in the world is
leveraging on outsourcing for most of their business processes.
 • current figures values this robust industry to a staggering
$20billion USD.
 • On an average global outsourced projects involve about 28%
that belong to the hard core IT sector, 11% to finance sector,
15% to sales and marketing and 9% from administrative
sector. The remaining 22%belong to many other different
sectors such as consumer distress calls, general data
segregation jobs, tourism etc.