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Advantages and Disadvantages of Outsourcing Business Functions

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Added on  2020-03-15

Advantages and Disadvantages of Outsourcing Business Functions

   Added on 2020-03-15

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1NameUniversityCourseInstructorDateAdvantages and Disadvantages of Outsourcing Business FunctionsOutsourcing is a situation whereby a company gets some job functions to be done outsidethe company. These functions are given to other people outside the company and the people are given full responsibility to handle them. Many companies large and small are using this method due to various reasons. One of the best methods the companies use to apply this method of outsourcing is to hire other companies which after hiring are the given the tasks to carry out. Thismethod is very convenient and has many advantages like reducing the work load in the company among others. There are different factors to consider before carrying out outsourcing. One of the main factors is determining if the company which is given the job is capable of doing it. This is done through the evaluation of the company’s capabilities and how it has been run to ensure that it is capable of doing the job. Due to the increased growth of outsourcing, this study is designed to evaluate the advantages and disadvantages of this important method and hence come up with some recommendations on how to improve it. This will lay a base for further research and make sure that many companies adopt it and use it.
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2Project objectivesThe main objective of this study is to access the advantages and disadvantages of outsourcing. The following is a summary of the other objectives of the study.1.To access the main reasons why many companies prefer outsourcing2.To evaluate the main factors which one should consider before starting outsourcing3.To discuss the activities which a company should give out for out sourcing4.To determine the challenges which come with outsourcingProject scopeThis research will be carried out online by use of surveys. It will cover the whole globe since the researcher will use the internet to collect the required data. The researcher will design questioners which will be used for data collection and then they will be uploaded online in the relevant sites to allow different people participate in the study.
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3Literature review Outsourcing is the process whereby a company allows different activities to be done outside the company. This process is preferred by many companies to reduce the workload in those companies. This method of outsourcing was not common until 1989 when many companies started to use it (Irving 2015). From 1989, many companies started to use the method as an alternative to reduce workload. There are many factors to consider before a company starts to use outsourcing. The following discussion will summarize some of those factors.Company’s capabilityBefore getting into outsourcing, the company should evaluate the capability of the other company which will carry out the outsourcing process to make sure that it is able to do so. One of the methods the company should access this is by looking at the history of the company which will handle the job and evaluate the company has been reliable (Oshri et al. 2015).SecuritySecurity issues have become one of the main challenges to many companies today. This has been caused by the development of technology hence also promoting crimes. Many companies suffer every year due to security issues especially cybercrimes. This makes it very important for giving out the outsourcing services to other company’s security matters should be evaluated with a lot of care. These security issues include the data security and other company assets security. This will make sure that the company will not be a victim of security issues andhence prevent any kind of loss which may occur. It will also make the company have the competence and hence increase its reputation in the market.
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4Advantages of outsourcing One of the main advantages of outsourcing is that it helps the company focus on the mainactivities of the company. Due to the growth of companies, the back office activities also increase and hence they may consume a lot of labor if done within the company (Li et al. 2014).Due to this many companies prefer outsourcing to carry out those activities so as to minimize the associated costs. Another advantage of outsourcing is flexibility. If a company considers outsourcing, it makes it employees flexible during work and hence making it possible for them to carry out duties in a good way which may improve the performance of the company (Talluri 2016). The workers focus more on the main issues of the company and hence make the running smooth.Also, development of internal staff is another advantage of outsourcing. If a company hires another company to carry out a project for them, it means that the company’s staff may nothave the skills which were required to carry out the duties and hence hired the other company. In the process of carrying out the tasks, the company’s staff may get an experience which it did not have and hence they may carry out the tasks other time using those skills (Rivard and Aubert 2015).Another advantage of outsourcing is that it makes things more reliable. During outsourcing, the company gets its work done for a short period of time and hence making it more reliable to its customers. Due to the increased reliability, the company may get more customers and hence increase its productions and profits leading a great expansion. This advantage makes many companies which want to grow used outsourcing as the main method of growth.
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