OUTSOURCING

Outsourcing



Outsourcing

Introduction

In a constantly changing, hostile and hectic, companies tend to be more flexible and supple. This purpose can only be acquired through a strategy to reduce costs and focus on core business. From this perspective, outsourcing itself is an innovative strategy that allows the company to adapt to its context and to counter the competition. However, the introduction of an outsourcing project can be accompanied by a number of risks, on the one hand, organizational, namely the loss of control over the outsourced activity, failure costs and more share negative impact on jobs and careers. Outsourcing can be defined as "The operation of a company to entrust to a third party, for a period long enough, management and maintenance of one or more activities that are necessary for its operation, these activities gets described in terms of outcomes, and essential characteristic of an outsourcing operation is that the third party is solely responsible for the means to implement to achieve the objectives” (McDonald, 2005).

The benefits of outsourcing

It is true that the majority of studies attribute the merit of outsourcing to reduce costs of production outsourcing company; however, the main objective expected in a strategic outsourcing is the concentration on core business. We can summarize the advantages of outsourcing in the following points:

The control or reduction of costs:

Indeed, the transfer of activity to a specialized service provider allows the latter to lower the costs of such activity by reason, experience (economies of scale due to the experience) of its size (structure of provider and its size can achieve economies of scale due to the `size) or the holding of a patented technology process or technique of its own to enable it to achieve economies of scale (Peter, 2005).

Flexibility

By definition, the flexibility or flexibility is the ability of the company to adapt to changes in context. Strategic Outsourcing allows the company to be more flexible as this one has a work done on time, especially as the adaptation to the structure of a service increases the flexibility of outsourcing business. Concentration on core business is commonly the most significant benefit. In an outsourcing operation, transferring operations to the provider, the client company has a relief of organizational complexity since it is with less functions and activities, resulting in a favourable position to focus on core activities to its mission (Baziotopoulos, 2006).

Monitoring of technological developments

By outsourcing one of its activities for the benefit of a specialized service provider in the field, the client company can benefit from the knowledge of it and keep an eye on market developments of the outsourced activity (Oshri, 2009).

Improving the quality of services

This advantage is also the provider's specialization in the field of outsourced function, which allows it to provide high quality services. Today the quality improvement and a requirement requested by the client company and specified as a clause in the outsourcing contract.

The financial benefits of outsourcing

The outsourcing operation may allow the client company to reduce its debt, in effect transferring the ...