The Pros and Cons of Outsourcing

Paper Summary:

The paper explains the advantages and disadvantages of outsourcing key business processes and details what can be outsourced and which companies should outsource. The paper presents the framework that companies use to prepare and implement an outsourcing plan. The paper shows how companies' needs for compliance, today's challenges of complexity and the need for driving down costs have created a foundation on which outsourcing will continue to flourish. The paper includes diagrams and a table that outlines the concepts of outsourcing as appendices to the paper.

Outline:
Introduction to Outsourcing
The Advantages of Outsourcing Key Business Processes
The Disadvantages of Outsourcing Key Business Processes
What Can Be Outsourced? Who Should Outsource?
Critical Steps to Prepare and Implement an Outsourcing Plan
Conclusion

From the Paper:

"Having begun primarily in the IT industry and today progressing into many functional and process areas of companies, including manufacturing, outsourcing is now a global economic factor that is influencing entire nations' economies. Originally defined as the subcontracting of information systems processing including the more routine and easily transferred tasks and processes (Espino-Rodriguez and Padron-Robaina 2006) which were the least risky to subcontract out for completion, outsourcing today is now being increasingly trusted with the more complex, more risky processes in organizations, including global trade financial services, and distributed order management."

Sample of Sources Used:

• Alstyne, Marshall van, Erik Brynjolfsson, and Stuart Madnick (1997). "The Matrix of Change: A Tool for Business Process Reengineering". MIT Sloan School Working Papers available on the Internet, accessed on August 8, 2007: http://ccs.mit.edu/papers/CCSWP189/ccswp189.html
• AMR Research (2002) - "Offshore Outsourcing: Is It A Viable Approach for All Projects?" Laura Carrillo, Kathia Desronvil, Colleen Niven. AMR Research, Boston, MA. June 30, 2002
• AMR Research (2004) - "Successful Outsourcing Work Offshore is in your Hands." October, 2004. Lance Travis and Marc Meunier. AMR Research, Boston, MA.
• AMR Research, (2005) - "Finance Business Process Outsourcing: Achieving Benefits and Minimizing Risks." Authors: Lance Travis, Judy Sweeney, and Will McNeill. Published February, 2005. Page 8.
• Bailey, W., R. Masson, and R. Raeside (2002). "Outsourcing in Edinburgh and the Lothians." European Journal of Purchasing & Supply Management, Vol. 8,pp. 83 - 95.

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