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Outsourcing is defined as the process through which an organization contracts a function that already exists in the organization to an institute that is independent. In the process, the company ceases to carry out the outsourced function. In the modern business unit, contrary to the earlier ones in which organizations were in-house, many use outsourcing nowadays. Nevertheless, as usual, every outstanding feature must have its own weaknesses which, when ignored, may cost the business a lot. The paper discusses outsourcing, the factors, as well as criteria that are considered preceding an outsourcing deal.
To outsource or not to outsource is the question that many businesses in the world contemplate. The answer to if the process is put in place is usually dependent on the details of a project, expertise, and future benefits. In order to engage in the practice of outsourcing, one of the factors that are keenly considered is the role of the product or service in the business. It would be infantile to carry out an investment that is not positive in terms of income to the business (Tallman, 2010, p. 12). Another factor that should be taken into consideration is the specialized skills. Companies carry out the process of analysis to find out to what extent they may seek help in the business, and this is the point that cannot be simply ignored. Additionally, organizations also focus on time. Duration in terms of time is crucial to any business as every businessperson knows that time is money. With regard to this, it is essential to know how long, considering the aspects of the product or service produced, a project that is being outsourced will take, in order to pass the budget that is set forth to meet the period requirements. Furthermore, another factor that is of concern is the confidentiality of the information that is to be disclosed for the development of the product or service since, through this, the lifeline of the business is usually at risk.
Another factor that is rarely considered is the results that the outsourcing project brings forth. It is not wise for any business to ignore this fact since it would be improper to carry out a plan from which the business does not benefit. Therefore, with careful consideration in the life span of the business, it is appropriate to know the skills that the outsourcing endeavor will present to the ongoing business. Furthermore, a business also focuses on whether the project is going to be terminated early due to the lack of adequate resources, and hence through this, the business then knows how it should budget itself so that it may ensure that it does not venture in incomplete projects. The next area of focus is the staff (Tallman, 2010, p. 37). If a company does not have adequate staffing, then the proprietors or managers of the organization usually need to know how they should mange the situation and counter the deficit.
Another issue of concern the business usually focuses on is management. Subsequently, the organizers usually involve in the process of managing the service or product that they outsource. If there are no adequate management procedures, then it means that the outsourcing endeavor failed.
In-house ventures are not quite widespread in the modern world as they were in the past. Businesses usually consider the activity that is outsourced. If the outsourcing project is the core, then there is the need to ignore the prospect since it is a lifeline issue. Additionally, the businesses also focus on whether the service is long or short term, and then it decides as to whether it may develop specialized skills. If, in the event of the execution of the project, there is the process of giving out information that the business considers private, then the organization usually opts out from taking part in that. The final aspect that is considered by businesses is if the employees who are involved in the project will be needed after the completion is over (Tallman, 2010, p. 9). This means that if they are needed, it would be appropriate to outsource, and if not, it would be unwise to employ them. New labor means that if there are new skills, then the company will remain in the business, and that is a positive factor. Additionally, if a project ends with the labor force in the business not acquiring some skills, then it is not wise to partake in it.
To sum everything up, it is worth mentioning that a lot of factors are considered when there is a need to outsource by a company. This is because this process uses the resources of the business, and additionally, it leads to a great employment of the workforce. Therefore, this makes the management focus on either positive, or negative sides before starting the project. Nevertheless, businesses still outsource across the globe after a careful analysis of the aspects aforementioned.
Tallman, S. (2010). Global Strategy. West Sussex: John Wiley & Sons.