building a better business with outsourcing presentors nitesh khatiwada roshan pant soni sahani...

BUILDING A BETTER BUSINESS WITH OUTSOURCING

PRESENTORSNITESH KHATIWADA

ROSHAN PANTSONI SAHANI

ADITYA KUMAR JHASANGITA LAMA

Presented toDr. Dhruba Lal Pandey

Nepal Commerce Campus

Minbhawan; Kathmandu

Nancy Mann Jackson;Growth Strategy, Entrepreneur

2015

PRESENTATION OVERVIEW(OBJECTIVES OF THE ARTICLE ANALYZED)

o INTRODUCTIONo VARIABLES DISCUSSEDo WHAT ARE OUTSOURCED?o DECIDING WHETHER TO OUTSOURCE?o PROS AND CONS WITH OUTSOURCING?o FINDINGSo CONCLUSION

Outsourcing

What is Outsourcing?• Outsourcing is a strategic decision to give a task or

activity to an independent contractor who determines how best to do the task or activity.

• The firm and the independent contractor become partners and may establish a long-term relationship.

• Examples of outsourced activities: IT, HR, Legal services, Manufacturing, R and D.

• Note:not just manufacturing but many more are outsourced today

Sourcing Decisions

• Single sourcing:Choosing a single supplier

• Multiple sourcing:Choosing several qualified suppliers

• Cross sourcing A sourcing strategy in which the company uses a single supplier for a

certain part or service in one area of business, and another supplier with the same capabilities for the similar part or service in another area of business.

Coming to the Article

• Most entrepreneur despite having potentiality fails sometime for many reasons

• One of them is that they can’t devote time in all aspects of organizational work

• So the trend of outsourcing has increased

• Workload are being shifted and managers can focus on core task of business

• Important aspect is “what is to be outsourced” and “when to outsource?”

• Fruitful result are achieved on matching between what the business wants and what the provider specialize in

VARIABLES DISCUSSED

• Locus of Specialization (What to outsource?)• When to outsource?• Finding the right contractors• Control over Work Performed (How to make

Contractors work?)• Costs of Activity (How to count the cost?)• Quality of Work (Challenges of Outsourcing)• Reaping the Benefits

When to Outsource

• Right time differs as per business• New projects• Employees can’t handle day-to-day

business• Further growth of business

Deciding Whether to outsource?(OUTSOURCING CONSIDERATION)

• These days any task can be

outsourced

• Sometimes there are things you

don’t want to do but they are

important for your core business

• Don’t outsource that you don’t

want to do it

• Come to a decision – What is core to the business and the future

of business?– What can bring competitive advantage?

• Decide what to outsource– (MAY BE)Highly skilled or executive,

expertise– Highly repetitive tasks– Specialized knowledge

Deciding Whether to outsource?(OUTSOURCING CONSIDERATION)

Deciding Whether to outsource? Contd……………………

• Find the right contractors – Reliable outsource provider– Your own network– Online networks– Placing ads– Request for proposal– Professional association or trade group– Virtual market places

Deciding Whether to outsource? Contd……………………

• Choose a partner(contractors)• Make a match between what the

business wants and what the provider specialize in

• Use incentive to motivate the outsourcer to focus on what is most important to you

• Lay out requirement and expectations in the beginning

Pros and cons With Outsourcing

PROS• Lower labor costs• Low investment risk• On - demand talent: product development

and management skills available if not found in-house

• Time-to-market improvement: Products can be launched closer to the point of consumption

• Introduction of new and legacy products in new markets is more efficient, because of local familiarity with the market.

Pros and Cons With Outsourcing

CONS Potential security problems Identifying qualified and reliable suppliers Disruption of supplies Low product quality Difficulty in protecting confidentiality Provider may not understand business environment Too dependent on service provider

FINDINGS

Source: http://www.statista.com/topics/2257/business-process-outsourcing-industry-worldwide/

FindingsSource:

FindingSource:

CONCLUSION

• Vendor’s service offering are evolving• Demand for more value by customer

to vendors• More concentration on multi-vendors

management• Will be influenced by Global Economic

Condition• Continued growth in the industry

Thank You!