Management Skills and Personal Development

Management Skills and Personal Development

Formative Assignment

Outsourcing

Nowadays a lot of information appears in the press about successful companies which implement outsourcing in their strategies. But before starting the evaluation of implementation an outsourcing strategy for a company, it is important to understand what it is, analyze its pros and cons.

It is logical that the word "outsourcing" is derived from the words «outside resource using», which means "the use of external resources."

Outsourcing - is the transferering of previously implemented and independently perfomed functions of the company to an external company for a long period of time, specializing in the implementation of such functions. Most common areas to outsource are consider to be: HR, Insuarance, Accounting, Security, Marketing, IT functions, Networking and Telecomunication. For example, call center services, cleaning companies, legal and accounting firms and companies for preparation and delivery of dinners in office, etc. Today the most common way of outsourcing is to outsorce oversees to the cheap labour contries like China and India. If to look closer there can be found some reasons why companies prefer choose to outsource a particular function of their business.. So, for managers of the company one of the most important thing is to understand the business they do and its goals and decide how outsourcing can help to attain their targets. And is obvious that most managers finally take the decision to implement outsourcing because they are going to save time and money (Introduction to Outsourcing, James Bucki).

Outsourcing can significantly increase the efficiency of a company with the ability to attract almost any staff to implement a wide range of services necessary for the business. Outsourcing frees the company from having to increase staff and hire staff to perform some non-core or temporary functions. According to Keith Lowe, a company «does not have to become an expert in a particular area, you can depend on the outsourced company to be the expert» (The Pros and Cons of Outsourcing, Keith Lowe). That means that managers get the opportunity to focus on the core business issues instead of be distracted by the necessary but not essential matters (Introduction to Outsourcing, James Bucki). One more advantage of outsourcing is flexibility. It becomes a lot easier to control seasonal or cyclical demands on the resources of the company which can vary during the year. By the words of James Bucki, «An outsourcing contract gives the flexibility which is needed to stabilize these varying demands» (Introduction to Outsourcing, James Bucki). As it was mentioned above, the strongest advantage of outsourcing is its ability to save money, and it is clear that it mostly depends