Business Information Outsourcing: Challenges and Benefits

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Topic: - Business information outsourcing
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Abstract: -
India is nowadays increasing outsourcing and being
a destination all over the world of services that are
mainly IT-enabled or IT. The context below has a
discussion of challenges in offshoring and
outsourcing and also the benefits associated with it.
All the premises that prefer offshoring and
outsourcing uses India as a destination. Here we
have also discussed various models that are used
for outsourcing and offshoring and have shown a
perspective on determining the best-suited models
according to the needs of a particular project and
clients need [4].
Introduction: -
In this report, we will discuss business information
outsourcing. outsourcing is the organization
practice where one organization contracts the
service from other external organization or vendors
while keeping control of the assets of the service
that is being outsourced. This practice of
outsourcing or contracting any services by an
organization is an old technique that was used to
ease the work an at low cost. For example, the
federal government contracted a private sector
company for acquisition services, which includes
design, construction services and planning for more
than 100 years. However, the factors that led to
new interest while emphasizing on outsourcing. For
the organization in the private sector, outsourcing
was started as a component strategy of increasing
business profitability. In the public sector concern
about federal govt.’s budget deficit. Continuing
cries for large cities are long-term fiscal and the
factors other than this lead to effort in government
growth and expenditure.
Business information outsourcing: -
The business information system is also called
business process outsourcing or BPO. It provides
the external services for the other organization
which can do the work better and at low cost as
compared to doing it by the organization itself.
Nowadays, there are the outsourcing of almost
everything and even more outsourcing organization
are making there move in the business industries.
Outsourcing in the business works in the same
manner. Therefore, giving that work to the other
organization that has the availability of the required
resources to complete the task [1].
Outsourcing in the IT sector: -
Outsourcing is similar to other outsourcing practice
that includes hiring one kind of resource or part of
a process from the third party that is capable of
handling that resource more efficiently than the
organization itself. It is very cheap and efficient to
give a part of work or resource that is not possible
for the organization itself to do without installing
certain equipment and devices or other utility or
buying certain gadgets. Therefore, giving that work
to the other organization that has the availability of
the required resources to complete the task.
The reasons why companies are promoting
hiring the third party for outsourcing: -
1) Reduction of cost: -outsourcing can save more
money on the organization due to significantly
low labor cost, cheap infrastructure, and also
tax saving.
2) Using internal resources better: - by hiring a
third party for processing business in house
employees will be given an opportunity for
focusing on meaningful tasks.
3) Enhance business processing speed: - instead
of investing time on time-consuming process,
giving it to others so that the time can be
utilized to do another thing that will speed up
the process.
4) Skills that are unavailable to the
organization can also be accessed: - through
outsourcing an organization can easily reach
the skills that are required to do a reticular kind
of work [5].
Benefits of the following outsourcing: -
1) Uninterrupted workflow: - due to the
differences in time of the working of the
outsourcing team and the in-house team
functioning of business will be smooth and
uninterrupted.

2) Expenses are reduced: - significantly cost is
reduced when a company outsources to a
country having the least production costs.
There is a reduction in costs like operational
costs, employees’ living cost, salaries of the
employees and the less requirement of
infrastructure.
3) Fast upscaling ability: - more time can be
invested to handle a greater number of clients
without spending much time on resources that
are outsourced.
4) Time-saving: - partnering with an outsourcing
organization there is no need to advertise,
select appropriate candidate, interview them
and investing in the training of old employees.
5) Global access of talent: -by outsourcing an
organization can reach to the professionals that
are skilled in a particular field that is required
by the organization and can be chosen from all
over the world [3].
Disadvantages of outsourcing: -
1) Long distance: - the business trip for getting
to the outsourcing vendor and the organization
may lead to moving towards more expenses.
Then the idea of outsourcing for cost reduction
will fail.
2) Language barriers: -although outsourcing
gives an opportunity to get the best
professional for the work around the globe
there can be a situation when the organization
likes the work of an outsourcing vendor but
due to lack of communication due to different
language understanding the idea will have
some limitations.
3) Time differences: -the difference between the
time of outsourcing vendor and the in-house
employee can sometimes be a curse as it will
hamper the flow of communication between
both.
4) The habit of working: - due to the different
environment of working culture can result in
interruption of workflow and need to get used
to.
Outsourcing challenges: -
Although outsourcing is beneficial and favors the
organization in different ways and also provide
employment to many skilled workers. But it is
difficult to implement and the rate of failure of
outsourcing work is every time high. And can reach
to the number of 70 percent. the outsourcing
service providers face a problem as the client's
searches for the best deal and the quality of work
they can get at the particular cost and if seems to be
high they think of doing on their own which
increases competition for the other outsourcing
vendors. There is a rush in order to outsource the
better business case. Outsourcing is taken as a
quick fix that cut cost than investing to enhance
abilities, and globally expand the business, increase
profitability, competitive advantages likely
disappoint.
Conclusion: -
Outsourcing in its overall impact seems in an
important trend. There are some pros and cons
associated with it are discussed above by observing
which we can say that it has helped the
organizations and others to grow and follow the
competition in a healthy way. In India outsourcing
has increased to the global extent and everyone is
making a profit when expanded more in the market.
It helps in creating job opportunities for those who
are in need and having a unique skill that can be
useful to the organizations. It will help to cut costs
for outsourcing in the countries where the wages
are a lot cheaper than India which will help any
company to grow its profit and result in creating
more jobs. With growing companies, the
relationships will grow which will benefit both
afterward [2].
References: -
[1] Schniederjans, M.J., Schniederjans, A.M. and
Schniederjans, D.G., 2015. Outsourcing and
insourcing in an international context. Routledge.
[2] del–Río–Ortega, A., Gutiérrez, A.M., Durán,
A., Resinas, M. and Ruiz–Cortés, A., 2015, June.
Modeling service level agreements for business
process outsourcing services. In International
Conference on Advanced Information Systems
Engineering (pp. 485-500). Springer, Cham.
[3] Dinu, A.M., 2015. The risks and benefits of
outsourcing. Knowledge Horizons.
Economics, 7(2), p.103.
[4] Magelssen, C., Sanchez, F. and Damanpour, F.,
2015. Learning from outsourcing: the effects of
outsourcing strategy on organizational efficiency.
In Academy of Management Proceedings (Vol.
2015, No. 1, p. 17468). Briarcliff Manor, NY
10510: Academy of Management.
[5] Schöner, C.R., Schöner, M.G., Grafe, T.U.,
Clarke, C.M., Dombrowski, L., Tan, M.C. and
Kerth, G., 2017. Ecological outsourcing: a pitcher
plant benefits from transferring pre‐digestion of
prey to a bat mutualist. Journal of Ecology, 105(2),
pp.400-411.