Outsourcing
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This document discusses outsourcing and smartsourcing. It defines outsourcing as transferring non-core business processes to third-party vendors in order to reduce costs. Smartsourcing aims to not just cut costs but also drive innovation through strategic partnerships where risks and opportunities are balanced. Common business functions that are outsourced include IT, human resources, facilities management, and accounting. While outsourcing can lower expenses and focus internal efforts, disadvantages include loss of control and security threats. Smartsourcing creates innovation by emphasizing flexibility, preparation, choice, planning, control and partnership between organizations and vendors.
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The document provides an introduction to operations management. It defines operations management as the management of the conversion process that transforms inputs like labor, capital, land and management into outputs of goods and services. It discusses the key components of an operations system including inputs, conversion processes, outputs, feedback and random fluctuations. It also distinguishes between manufacturing and service operations and explores different aspects of operations management like planning, organizing and controlling conversion processes.
Production Management with it's objectives and functions
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Outsourcing
El documento proporciona una introducción al concepto de outsourcing, explicando que es una estrategia en la que una empresa delega ciertas actividades a empresas especializadas externas para reducir costos y mejorar la eficiencia. Luego, describe algunos pioneros y ejemplos comunes de outsourcing, así como consideraciones clave para implementarlo de manera exitosa, como seleccionar el proveedor adecuado y gestionar efectivamente la transición.
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- 1. Group 1: Outsourcing: From cost cutting to innovation Baleegh Khan Lenka Stoklaskova Ratiel Gapa Sara Chahine
- 2. Introduction •Outsourcing cost cutting, cost restructuring, transfer the risks of a defined process to a third party •Smartsourcing innovation, balance risk and opportunities, focus on its core activities •Challenges and future trends flexibility, overall control, cultural diversity
- 3. What is Outsourcing? • A practice used by different companies to reduce costs by transferring portions of work to outside suppliers rather than completing it internally. • The contracting or subcontracting of noncore activities in which a company holds competitive advantage.
- 4. Reasons for Outsourcing Source: http://www.arcusglobal.com
- 5. Outsourced Business Segments • Information Technology • Human Resources • Facilities and real estate management • Accounting
- 6. Types of Outsourcing • 1- Business Process Outsourcing (BPO): Contracting of the operations of a specific business process to a third party. It is typically categorized into back office outsourcing and front office outsourcing.
- 7. Types of Outsourcing • 2- Knowledge process outsourcing (KPO): The allocation of high-level tasks to an outside organization.
- 8. Advantages of Outsourcing • Cost Reductions • Access to a team of professionals • Focus on core activities • Develop Internal Staff • Better Systems • Distribution of Risk
- 9. Disadvantages of Outsourcing • Loss of Managerial Control • Threat to security and confidentiality • Delays
- 10. What is Smartsourcing? • Smartsourcing, simply put means outsourcing intelligently. • Outsourcing is only one part • Bridging the gap between high performance core competencies and poor performance non-core activities. • Let you see the spectrum of your organization capabilities • determine how to best achieve the highest level of performance, cost and innovation • Intimate relationship between the organization and its service partner
- 11. Difference between Outsourcing and Smartsourcing OUTSOURCING SMARTSOURCING CUT COSTS CUT COSTS + INCREASE INNOVATION STREAMLINE OPERATIONS STREAMLINE THE VALUE CHAIN PARTNER ON WHAT YOU KNOW PARTNER TO DEFINE WHAT YOU DON’T KNOW TACTICAL IMPROVEMENT STRATEGIC EXCELLENCE DISCONTINUOUS CONTINUOUS ARMS LENGTH PARTNERSHIP TRUST-BASED PARTNERSHIP
- 12. How can Smartsourcing create innovation? • Key Principles: • Flexibility (short term relationship, change of scope) • Preparation (measurement framework with real data) • Choice (multisourcing, reduce provider lock-in, greater options) • Planning (picture of end state, change management) • Control (retain the business value functions) • Partnership (shared ownership, common goals)
- 13. Smartsourcing Based on • Products and services • Business model • Processes • Supply chain • Customer care
- 14. Key Areas
- 15. Issues in outsourcing • A multi-objective solution • Flexibility – a trending theme • Due diligence and effective vendor engagement • Higher costs/slower product development • Environmental context
- 16. Conclusion • Careful analysis • Effective outsourcing • Don’t ‘Outsource your soul’
- 17. References • Brad Vaughan, Ken Buchanan, & Richard Evans Manageability Services Practice - White Paper September 2005 • T. M. Koulopoulos: Smartsourcing: Driving innovation and growth through outsourcing, Platinum Press, Avon, 2006 • Schwenker, S. Boetzel: Making growth work - How companies can expand and become more efficient, Sprin- ger Berlin Heidelberg, Hamburg, 2007 • http://www.entrepreneur.com • http://www.investopedia.com • http://www.businessdictionary.com • http://www.sitel.com • http://www.outsourcing.com • http://www.venturenavigator.co.uk
- 18. Questions?