HI6008 - Business Research Outsourcing | Report

Running head: OUTSOURCING 0
Business Research

OUTSOURCING 1
Table of Contents
Introduction................................................................................................................................3
Project Objective........................................................................................................................4
Project Scope..............................................................................................................................4
Literature Review.......................................................................................................................5
Reasons for Outsourcing........................................................................................................5
Benefits......................................................................................................................................6
Cost Saving............................................................................................................................6
Attention to Core Business.....................................................................................................6
Skill Acquisition.....................................................................................................................6
Customer Satisfaction............................................................................................................7
Operational efficiency............................................................................................................7
Risk Sharing...........................................................................................................................7
Drawbacks..................................................................................................................................7
Easy Replication.....................................................................................................................8
Forfeiture of Managerial Control...........................................................................................8
Hidden Expenses....................................................................................................................8
Security and Confidentiality..................................................................................................8
Quality Risk...........................................................................................................................9
Language obstacles................................................................................................................9
Lay-offs..................................................................................................................................9
Impact of Outsourcing................................................................................................................9
Conclusion................................................................................................................................12
References................................................................................................................................13
Appendix..................................................................................................................................15

OUTSOURCING 2
List of Figures
Figure 1: Outsourcing Business Impact...................................................................................15
Figure 2: Relation between Agreement and Earning...............................................................15

OUTSOURCING 3
Introduction
Outsourcing is a procedure adopted by many organisations to decrease their expenses by
transferring parts of their business functions to third party suppliers, instead of performing it
internally in the organisation. This strategy is adopted by companies to reduce their operating
costs. It is a common procedure performed by technology companies and other industries.
Various business functions such as manufacturing parts, human resources, information
technology, legal, call centers, bookkeeping, business analysis, and marketing. There are
various large companies outsourcing their business to other organisations such as Staples,
IBM, Kingston, Hewlett Packard and much more. This report will discuss from the
perspective of IBM, regarding the benefits and drawbacks of outsourcing a particular
business function to another company.