Sunday, 3 June 2012

An Investigation into Existing Global Outsourcing Trends (2012)

Outsourcing has become one of the most widespread practices adopted by private and public sector organisations, these practices have helped form successful global business strategies across continents. Most organisations outsource at least a few of the functions which they used to perform by themselves. Firms can achieve different advantages by successfully outsourcing their work, even though there are many risk involved if outsourcing is not fruitful. However, the decision to outsource is one of the major strategic decisions making for most of the companies. It involves evaluating the reduction in costs and comparing the consequences of loss in control over the performance of some business processes. The opportunity to offshore and outsource should never be taken casually, as they are affected by many social economic, cultural and political factors. Many academics comment that the market for outsourcing has experienced the strongest growth over the last few years owing to the increased focus on core competencies, web development initiatives, heightened usage of ERP, collaboration across different industries and a constricted work force pool. While, the outsourcing of non-core and transaction based business processes has especially gained vital impetus during the last couple of years for both large and small scale enterprises. They have now become more comfortable with the concept of outsourcing and its inherent advantages. The outsourcing market has got an enormous potential in future. According to Green and Henderson (2010) Outsourcing can be defined in the simplest way as “the transfer of operational responsibility of either business processes or infrastructure management to an external service provider.” The outsourced function or process is considered to be non-core in nature by customers, but the process can vary from high volume, repetitive functions like the electronic transaction processing system to even more customized services like technology help desk outsourcing. Even though outsourcing is not a new concept or terminology, it has got increasing recognition among corporations as an alternative to in house functions, as well as supplementing IT services and it has initiated significant growth for them over the last few years. As per IDC, the world wide information system outsourcing and processing services spending was about $116 billion in the year 2009 and is anticipated to reach $177.2 billion by 2013, showing a compounded annual growth rate of 8.8%.

Chapter 1 – Dissertation Introduction
Executive Summary
Aims and Objectives
The Offshoring and Outsourcing Economics
Employment and Outsourcing

Chapter 2 - Outsourcing
Who Benefits from Outsourcing?
How does outsourcing countries benefit from outsourcing?
Benefits of Outsourcing
Enables focus on core activities
Efficiency and Cost Savings
Reduction in Overhead
Operational Control
Flexibility in Staffing
Risk Management and Continuity
Development of Internal Staff
Key Drivers of Outsourcing
Disadvantages of Outsourcing
Loss of Managerial Control
Hidden Costs
Threat to Confidentiality and Security
Problems with Quality
Tie ups with financial well-being of another firm
Ill will and Bad Publicity

Chapter 3 - Literature Review Analysis and Discussion
Business Process Outsourcing (BPO)
Transaction based outsourcing
Business Methodology Outsourcing
Vertically focused outsourcing
Platform IT Outsourcing
Application Outsourcing
Third Party ASP
Proprietary ASP
Systems and Network Infrastructure Outsourcing
Domain Focus Segments
Call Centres
Electronic Transaction Processing
Human Resources
Impact of Outsourcing on the IT Industry
Emerging Trends in Outsourcing
Trend 1: The rise in spending on outsourcing markets
Trend 2: The growth of Multi-Sourcing
Trend 3: Changing role of India
Trend 4: The promise of China
Trend 5: Emerging Competition among Countries
Trend 6: Returning to Software as a Service
Trend 7: Outsourcing aids Insourcing
Trend 8: A strong trend-Nearshoring
Trend 9: Increase in Knowledge process outsourcing
Trend 10: Captives-Selling and Building
Trend 11: Successes and disappointments of outsourcing
Future of Outsourcing
Winners and Losers of Outsourcing

Chapter 4 - Conclusions and Recommendations
Conclusion
Recommendations

References

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