Business Outsourcing and Functions †Free Samples to Students

The process of contracting out or delegating work to people or agencies outside the business premises is called outsourcing business function. It may evolve in carrying tasks, job, or any operation where external third parties are contracted for significant time period  (Riley, 2010). The work outsourced can be performed in house or outside the firm. Outsourcing has gained much importance with changing nature of businesses   (Dendler, n.d.). In last decades, many big and small organisations which are getting associated with globalisation, considers outsourcing function as a positive approach. Geographical limitations are dealt with ease by facilitating outsourcing business functions like manufacturing, customer support, in house support, advertisement, etc.  (ITONews.eu, 2017) The role of strategic management has become important not only to look after business practice carried within organisations, but also manage work that can be outsourced to get efficient work with cost red uctive ways. Since outsourcing itself is a complicated process, a company may face various challenges while implementing it into business  (Pellicelli, 2012). In this literature review opportunities of outsourcing in business along with major challenges faced by it will be reviewed and analysed with the help of research made by authors and researchers along with identifying gaps between the studies. As shown in above figure, the reason to outsource work to external providers is various and thus becomes necessary to introduce it in business. Depending on the nature of business the outsourcing function may vary but the primary objective behind it lays the same i.e. cost reduction or gaining efficiency in work  (Kremic, 2006). For example, in large manufacturing companies where great number of people is required like labours, designers, suppliers, contractors, etc. outsourcing provides great help as requirement of hiring full time staff is not necessary on outsourced areas. In manufacturing firms large number of parts are manufactured by outsourced companies which could otherwise have been expensive or difficult to manufacture by own. In customer service companies like call centres and BPOs, large firms outsource their customer related services in order to reduce costs of making separate department for them in house. Other human resource management tasks like employee training ce ntres, payroll, staff benefit management, etc are largely outsourced in order to get higher quality work from experts  (Anon., 2011). Advertising plays a major role to make enhanced sale of product or services in business. Outsourcing has given industries a great backing here as large number of advertising companies and social media sites gets outsourced by businesses and carries the work in lesser time. Therefore in some or the other way business is largely depended on outsourcing function to expand their work area and bring in efficiency. Work quality is improved by hiring experts along with enabling business owners to give core efforts in major activities for development of the firm. Although outsourcing is becoming centre in today’s business functions, the challenges to improvise them are also increasing. Thus it becomes necessary on management part to understand the key benefits and potential challenges behind outsourcing function in business  (LLP, 2010). The opportunities relating outsourcing function is been developing and is considered to be highly potential in business  (Kremic, 2006). The advantages of it can be clearly seen in running of organisations which is observed and described by different authors. The following figure depicts major opportunity that can be gained by business while implementing outsourcing function. Operation costs reduction: This is the most advantageous feature of outsourcing which helps organisations to eliminate expenses of full time staff for executing operational or manufacturing area. If manufacturing of parts that requires special machine or assistance of special technicians is outsourced, it can reduce the requirement of setting those expensive machines and hiring full time technicians  (Crosby, 2017). Works related to internal management area like legal, planning, product designing, etc. requires expert advices. Outsourcing can provide scope for expert advice in cost effective manner as they may be efficient in their work while giving services to many companies simultaneously. Easier cost control: The role of management plays an important part to recognise cost curtail in organisational functions as if outsourcing is done in proper and planned manner, it can prove very effective in controlling overall costs of business. Like if a company’s work is seasonal, the hiring of full time staff can increase the cost of project while outsourcing can minimise the costs, provided, the availability of staff is possible during peak season. In other areas like cleaning and sanitizing, transportation, currier service, advertising etc. are normally outsourced in large organisations in order to perform the task in effective and cost reductive way  (Simeoni, 2011). Cooperation with specialist from narrow area: The requirement of advisors in legal and administrative part of firms can prove expensive as the specialists charge higher rates if engaged full time. Outsourcing these functions can provide engagement of experts in lower costs as they work together for many companies and take charges in distributed way. Big organisations prefer to hire full time staff for crucial jobs where important data is used whereas small companies find it easier to outsource these functions and get expert advices in nominal rates  (McCray, 2012). Process optimization and rising efficiency: Outsourcing gives opportunities to the companies to get exposure to merchant specialized systems. By outsourcing work to them, efficiency is increased along with gaining quality products. It also enables time optimization by outsourcing time taking processes to outsiders  (Simeoni, 2011). For example in restaurants and hospitals where large quantity of food and vegetables along with other supplies is required to be purchased on daily basis, outsourcing its marketing function to vendors and supply agencies can get their work done in quicker way and on time. Liberating capital for other purposes: While outsourcing work, capital of the firm is liberated and can be utilized for other important areas. For example, outsourcing Social Medias for advertisement or brand promotion will be easier for the company than to make provision for brand promotion by them and invest in campaigning and door to door advertising. Expenditure can be saved as Social Medias provide advertising function in cheaper and effective way. Thus saved expenditure can be utilised in other important areas like planning and executing  (Pellicelli, 2012). Releasing internal capabilities: This function is also very important as many companies take advantage of outsourcing to release themselves from tedious jobs for other important works. In businesses large number of activities is carried and distributed among employees within the organisation and some are delegated to outside agencies. The owners keep themselves free for monitoring and executing confidential functions of organisations  (Kremic, 2006). This function not only saves time and energy of delegators but also helps them in sharing risks with the outsourced agencies. While making contracts and terms, company’s mentions the time and quality required and if the outsourced company fails to do that, they are entailed to bear losses if the products are not appreciated by the customers  (Crosby, 2017). Although there are many benefits of outsourcing, there are many challenges also which are faced by the companies. No matter how much planned or budgeted management is, there are few challenges still met by them which have been identified by researchers  (Wong, 2006). As shown in the figure below, the major challenges faced by companies are considered and discussed while giving suitable example. Loss of control: One of the biggest challenges faced by business while outsourcing some of its functions is losing significant control over the outsourced area. Since the external agencies become responsible for task completion, they might not let the delegators to interfere while the task is been performed  (Arena Solutions, Inc., 2017). Thus before realizing the possession; the owners lose control in those areas. Like in product manufacturing company, the outsourced manufacturer may lose quality as they work for many companies altogether and cannot look at each company with consideration and while they restrict the delegators to interfere with their processes, it becomes challenging situation for the outsourcing companies. Coverage: In larger companies where many tasks are outsourced, it becomes difficult on management part to cover entire area monitoring in regular basis. Challenges relating outsourcing done in house are exempted from this factor, while others like manufacturers, advisors, advertising agencies, transport agencies, training experts, etc. are difficult to get covered under monitoring system of management. For example, in hotel business, where large number of activities takes place like cooking, cleaning, sanitising, marketing, etc. lots of people are engaged and many works are outsourced. Thus can become challenging for the management to look after all areas with concentration  (Gammelgard, 2017). Employment Inefficiency: While work is outsourced, it may sometimes result in losing morale of employees and reduce their work quality. This is another challenge faced by organisations and to overcome it the management needs to consider outsourcing from employees view point  (Sethi, 2011). For example if an important or growth oriented program is outsourced and employees are given only tedious and directive work, they might lose faith in their capabilities and thus reduces work performance and efficiency. Many stakeholders: Stakeholders are the ones who are directly or indirectly related to the firm commercially. When work is outsourced, more people and agencies get attached to the company and thus becomes an integrated part of the firm. To some extent company becomes liable to them as if their reputation is hampered; the affects might also be faced by the company. Thus outsourcing involves many stakeholders who bring in risks for delegators. This challenge is normally faced by big organisations where huge activities take place in speckled and global ways. While the organisations work is delegated in dispersed way and sometimes to other countries also, they become liable for many stakeholders  (Whitebox Buisness Solutions, 2012). Dispersed locations: Most companies outsource work to agencies in dispersed areas and sometimes to other countries also (of-shoring). While the work is scattered it becomes challenging on the management part to deal with them at the time of difficulties  (Whitebox Buisness Solutions, 2012). For example, agriculture functions for producing food crops are outsourced in food industries where the organisations are unable to do of their own. Since it requires large area and sometimes even outsourced to other countries favourable for producing required crops, the challenge of dispersed location is faced. Other challenge faced by organisations while dispersing its activity to other countries is challenge of culture and language diversification which makes difficult for organisations to tackle while trading product and service related issues. Budget inadequacy: Sometimes the outsourcing companies are unable to understand and figure out the difference in costs between self working and outsourcing. If made without proper planning, outsourcing can sometimes prove ineffective function with increased cost expenditure. The challenge faced here is to make proper planning for the outsourcing function so that budget is not disturbed. On the other hand where the business has got limited number of administrators, outsourcing becomes necessary and the budget for it can sometimes prove inadequate for them  (McCray, 2012). Know how: This challenge has two meanings in literature. One reveals the challenge of getting knowledge about the quality of outsourced work while other reveals the knowledge about method used for doing the work. For example, firms relating manufacturing of medicine outsources manufacturing of some medicines which requires special machines and is difficult for them to purchase. While the manufacturing is outsourced, sometimes the product delivered by the agencies can be of inferior quality and made under unhygienic conditions. This can become dangerous and even lead to shutting down of outsourcing companies. Thus a very crucial challenge faced by organisations is getting informed about the procedure of outsourced work  (Wong, 2006). To understand the opportunities and challenges while outsourcing in business is very important as to outsource work in business has become extremely important in today’s business world. In fast developing countries, globalisation in organisations has gained significance which could be facilitated by outsourcing  (Anon., 2011). The key opportunities that lie in outsourcing like cost reducing way and work efficiency are the reason why most companies prefer outsourcing their business function  (ITONews.eu, 2017). The gaps that are identified in this study are knowledge about proper method and technique with which successful outsourcing function can be obtained. Although researchers and authors have provided many important information’s for the company’s who have or are planning to implement outsourcing function in their business, still the effective procedure for outsourcing is required so that it becomes easier for managers to improvise it with ease. In this re search paper the analysis between opportunities and challenges of outsourcing business function have been made after making a brief study about outsourcing in order to attain utmost information  (Simeoni, 2011). While outsourcing, opportunities like cost effectiveness is gained along with increased efficiency on the other hand the company tends to lose control over significant areas. Engagement of experts gives opportunities to firms in gaining expert advices while security risks relating important data are also possible. Time saving is probable if the work is done correctly or else could result in adverse affects. Although the managers are released for other significant growth related works, the quality of the outsourced work is sometimes hampered  (Simeoni, 2011). Therefore after analysing, it can be rightfully said that gaining opportunity of outsourcing is possible only after getting profound knowledge and talent to manage its challenges. Anon., 2011. Business Process Outsourcing. (BPO) Needs, Scope and benefits. [Online] Available at: https://freeinfotipsonline.wordpress.com/2011/07/06/business-process-outsourcing-bpo-needs-scope-and-benefits/ [Accessed 29 August 2017]. Arena Solutions, Inc., 2017. Manufacturing Outsourcing for Small and Mid-Size Companies: 10 Key Challenges & How to Address Them. [Online] Available at: https://www.arenasolutions.com/resources/articles/manufacturing-outsourcing-challenges/ [Accessed 29 August 2017]. Compare Infobase Limited, 2017. Challenges Of Outsourcing. [Online] Available at: https://www.naukrihub.com/trainings/challenges-of-outsourcing.html [Accessed 29 August 2017]. Crosby, T., 2017. How Outsourcing Works. [Online] Available at: https://money.howstuffworks.com/outsourcing2.htm [Accessed 29 August 2017]. Dendler, M.J., n.d. Outsourcing Challenges and Solutions: The Example of Craft Trades. [Online] Available at: https://www.neumann.edu/about/publications/NeumannBusinessReview/journal/Review_SP06/pdf/woodworkingoutsourcing.pdf [Accessed 29 August 2017]. Gammelgard, A., 2017. Three outsourcing challenges you may be facing. [Online] Available at: https://www.arenasolutions.com/blog/post/outsourcing-decisions/ [Accessed 29 August 2017]. ITONews.eu, 2017. Outsourcing – What are the advantages and disadvantages of outsourcing? [Online] Available at: https://itonews.eu/outsourcing-what-are-the-advantages-and-disadvantages/ [Accessed 29 August 2017]. Kingsley, J., 2017. Why OUTSOURCE CAD? and Advantages of Outsourcing. [Online] Available at: https://www.linkedin.com/pulse/why-outsource-cad-advantages-outsourcing-john-kingsley [Accessed 29 August 2017]. Kremic, T., 2006. Outsourcing decision support: a survey of benefits, risks, and decision factors. [Online] Available at: https://ankara.lti.cs.cmu.edu/11780/sites/default/files/Outsourcing-Survey.pdf [Accessed 29 August 2017]. LLP, M., 2010. The benefits and risks of outsourcing. [Online] Available at: https://www.lexology.com/library/detail.aspx?g=e698d613-af77-4e34-b84e-940e14e94ce4 [Accessed 29 August 2017]. McCray, S., 2012. The Top 10 Problems with Outsourcing Implementation (and how to overcome them). [Online] Available at: https://www.ssonetwork.com/business-process-outsourcing/articles/the-top-10-problems-with-outsourcing-implementatio [Accessed 29 August 2017]. Pellicelli, P.M.a.M., 2012. The Strategies of Outsourcing and Offshoring. [Online] Available at: https://www.aijcrnet.com/journals/Vol_2_No_9_September_2012/15.pdf [Accessed 29 August 2017]. Riley, J., 2010. Q&A - Explain what is meant by outsourcing. [Online] Available at: https://www.tutor2u.net/business/blog/qa-explain-what-is-meant-by-outsourcing [Accessed 29August 2017]. Schaffhauser, D., 2005. Outsourcing – What is Outsourcing? [Online] Available at: https://www.sourcingmag.com/what-is-outsourcing/ [Accessed 29 August 2017]. Sethi, M.S.a.D., 2011. Human Resource Outsourcing: Analysis Based On Literature Review. [Online] Available at: https://www.ijimt.org/papers/118-M514.pdf [Accessed 29 August 2017]. Simeoni, R., 2011. Understanding Outsourcing Arrangements 2. The reasons and the risks of outsourcing. [Online] Available at: https://inspiringscm.wordpress.com/2011/03/17/understanding-outsourcing-arrangements-2-the-reasons-and-the-risks-of-outsourcing/ [Accessed 29 August 2017]. Whitebox Buisness Solutions, 2012. Seven Challenges of Outsourcing Governance. [Online] Available at: https://whiteboxbizsolutions.wordpress.com/2012/03/05/seven-challenges-of-outsourcing-governance/ [Accessed 29 August 2017]. Wong, K., 2006. Top 10 Challenges of Outsourcing. [Online] Available at: https://www.cadalyst.com/management/news/top-10-challenges-outsourcing-6845 [Accessed 29 August 2017]. Looking for an answer 'who will do my essay for cheap',