Outsourcing
Outsourcing ADD A
GRAPHIC
HERE
Prepared by:
IO Marketing
www.inboundoutboundmarketing.com
What is Outsourcing?
• Outsourcing -
▫ “the strategic use of outside resources to perform activities
traditionally handled...
Why Do Companies Outsource?
Reasons for Outsourcing
• Traditional role - reaction to problem
▫ Reduction and control of costs
▫ Avoid large capital in...
What Can be Outsourced?
• system integration
• data network
• mainframe data center
• voice network, internet/intranet
• m...
In-House vs Outsourcing
• In-House
Activity costs, inclusive of labor and overhead
Raw materials, inclusive of shipping, s...
When to Outsource
• PricewaterhouseCoopers
Model
Grey
Area
Not
Outsourced
In House
if Possible
Outsource
Competitive
Strat...
How to Implement Outsourcing
• Program initiation
▫ Opinions and ideas shared to form draft contract
• Program implementat...
Problems That May Arise From Outsourcing
• Possible loss of Control
• Increased cash outflow
• Confidentiality and securit...
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Outsourcing

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  • Outsourcing

    1. 1. Outsourcing Outsourcing ADD A GRAPHIC HERE Prepared by: IO Marketing www.inboundoutboundmarketing.com
    2. 2. What is Outsourcing? • Outsourcing - ▫ “the strategic use of outside resources to perform activities traditionally handled by internal staff and resources” • Why should you opt in to Outsourcing? ▫ Outsourcing offers services that are scalable, secure, and efficient, while improving overall service and reducing costs
    3. 3. Why Do Companies Outsource?
    4. 4. Reasons for Outsourcing • Traditional role - reaction to problem ▫ Reduction and control of costs ▫ Avoid large capital investment costs ▫ Insufficient resources available • Modern role – business strategy ▫ Allows company to focus on their core competencies ▫ Keeping up with cutting-edge technology ▫ Creating value for the organization and its customers ▫ Building partnerships
    5. 5. What Can be Outsourced? • system integration • data network • mainframe data center • voice network, internet/intranet • maintenance/repair • applications development • e-commerce • end-user support system ADD A GRAPHIC HERE
    6. 6. In-House vs Outsourcing • In-House Activity costs, inclusive of labor and overhead Raw materials, inclusive of shipping, storage, handling and overhead Cost of invested capital + Estimated impact of outsourcing on costs and revenue ---------------------------------------------------------------------- Total cost of performing activity in-house • Outsource Proposal for outsourcing Anticipated future pricing adjustments Additional one time costs of outsourcing + Additional on-going costs of outsourcing -------------------------------------------------------------------- Total cost of outsourcing activity
    7. 7. When to Outsource • PricewaterhouseCoopers Model Grey Area Not Outsourced In House if Possible Outsource Competitive Strategic Non-Strategic Non-Competitive
    8. 8. How to Implement Outsourcing • Program initiation ▫ Opinions and ideas shared to form draft contract • Program implementation ▫ Transferring staff ▫ Service Level Agreement (SLA) ▫ Establish communications between partners ▫ Actual transfer of the service ▫ Establish management procedures • Contract agreement • Contract fulfillment ADD A GRAPHIC HERE
    9. 9. Problems That May Arise From Outsourcing • Possible loss of Control • Increased cash outflow • Confidentiality and security • Selection of supplier • Too dependent on service provider • Loss of staff or moral problems • Time consuming • Provider may not understand business environment • Provider slow to react to changes in strategy

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