Outsourcing and Negotiation in Project Management
The prevailing tendency of organizations is to concentrate on core activities and opt to outsource those activities which are considered to be noncore.
1) Discuss the concept of outsourcing, reason behind outsourcing and its challenges.
Outsourcing is the act of one company contracting with another company to provide services that might otherwise be performed by in house employees. Often, the tasks that are outsourced could be performed by the company itself, but in many cases there are financial advantages that come from outsourcing.
Many large companies now outsource jobs such as call centre services, email services and payroll. These jobs are handled by separate companies that specialize in each service.
Outsourcing is therefore, the process of contracting an existing business function or process of an organization to another independent organization and ceasing to perform that function or process internally, instead, purchasing it as a service.
Reasons for Outsourcing
i. Cost reduction/Cost Savings- outsourcing cuts costs such as labour costs, regulatory costs and training costs. Most companies that provide outsourcing services are able to do the work for considerably less money as they don't have to provide benefits to their workers and have fewer overhead expenses to worry about.
ii. Focus on Core Business- companies are able to focus their money and resources more towards improving the core aspects of their business when outsourced. this allows the outsourcing company to build onto its core functions that keep the business running smoothly.
iii. Access to more Knowledge, Talent and Experience- outsourcing means contracting to an organization that is more specialized in a particular area, e.g., payroll services. this means that the process that is outsourced will be performed in a more efficient and effective manner hence improved services.
iv. Increased profits- due to the fact that some services or
1) Discuss the concept of outsourcing, reason behind outsourcing and its challenges.
Outsourcing is the act of one company contracting with another company to provide services that might otherwise be performed by in house employees. Often, the tasks that are outsourced could be performed by the company itself, but in many cases there are financial advantages that come from outsourcing.
Many large companies now outsource jobs such as call centre services, email services and payroll. These jobs are handled by separate companies that specialize in each service.
Outsourcing is therefore, the process of contracting an existing business function or process of an organization to another independent organization and ceasing to perform that function or process internally, instead, purchasing it as a service.
Reasons for Outsourcing
i. Cost reduction/Cost Savings- outsourcing cuts costs such as labour costs, regulatory costs and training costs. Most companies that provide outsourcing services are able to do the work for considerably less money as they don't have to provide benefits to their workers and have fewer overhead expenses to worry about.
ii. Focus on Core Business- companies are able to focus their money and resources more towards improving the core aspects of their business when outsourced. this allows the outsourcing company to build onto its core functions that keep the business running smoothly.
iii. Access to more Knowledge, Talent and Experience- outsourcing means contracting to an organization that is more specialized in a particular area, e.g., payroll services. this means that the process that is outsourced will be performed in a more efficient and effective manner hence improved services.
iv. Increased profits- due to the fact that some services or