Outsourcing

Outsourcing

Introduction

For this paper, a healthcare organization UnitedHealthis selected. United Health is considered as one of the differentiated health company which is headquartered in Mineesota US. It holds 22 position in the Fortune top 500 magazines in US. This company offers a range of products and services by two operating business including Optum and United Healthcare. United health care group is associated with serving 70 million individuals throughout the world through its family of subsidiaries and divisions. United Health care is one of the largest health carrier in US. It was created in 1977 and in 1979 it introduced its health based plan and became a publicly traded company in 1984 (Paul, 2013).

Discussion

Methodology used to evaluate outsourcing candidate functions

The main focus of United Health is related to continuous improvement of system for maximizing operational availability. The candidate job function which was evaluated was IT and call centre. In this regard a survey was conducted by which opinions was gathered about the population which was viable for outsourcing the job function of candidate across many quality issues and determine the importance of the issues for outsourcing decision. Statistical comparisons were also made between different agencies opinions and the management level which considered maintenance and on-site support services as a bad candidate for outsourcing(Barthelemy, Quelin, 2006). United Health Managers considered IT and call centreservices as a good candidate for outsourcing. This level of management response had a major impact on the outsourcing decision.

Process for selecting a service provider

UnitedHealth Company is outsourcing its information technology services. These services are based on using latest technologies for medicine.Outsourcing is based on factors which are based on the internal and external activities and are based on the competencies of the firm, its strategic environment and the technologies. There are many factors as a result of which outsourcing a negative impact has on performance and it decreases performance. As a result of the increase in transaction cost the production costs decreases. Transaction cost result from the many reasons such as negotiating with vendors and searching them to monitor and coordinate costs, threat related to leakage of technology and delays in completion of project. The most important cost is related to searching those vendors who are competent and they can negotiate for contracts(Paul, 2013).

Process for relationship management, measurement, and governance

UnitedHealth uses a strong view of maintaining good relationships with the outsourcing company. It is very important for the company to ...