Outsourcing. Part 1.

Over the past twenty years, outsourcing has become a separate branch of business. The number of consulting companies, providing this kind service is growing.  Accenture, for instance, makes a specialty out of providing services of this type. Information technology specialists, IBM associated with outsourcing as a major part of the business.

Outsourcing is the conclusion of agreements with the external organizations to perform certain administrative (accounting, communication, computer network of the company) and routine (cleaning, security, maintenance work) functions; outsourcing solutions for its internal goals and objectives. Thus, this term describes the administrative decision of the company to transfer to another organization or another function that had previously performed by personnel of the company: it makes a decision whether to transfer responsibility for a particular activity, and the other party to pay the agreed price for the same result. A clear illustration of the question "make or buy" is the production sphere. Companies of this sector tend to buy components from suppliers, instead of trying to produce them. For example, automakers are ready to buy a lot of parts from suppliers (which are often complex knots) that are installed on the car during the final assembly. Procurement executives regularly ask themselves "to buy or to produce? '. Thus, outsourcing is one of the central issues for procurement services. The factors that influence the decision to use external services, including the current state of the business processes of the company and its ability to invest in people and technology development, capacity and geographical coverage of its own employees. The parameters influencing the choice of outsourcing to a particular category of expenditure are considered in Fig. 1.

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Fig. 1. Factors influencing the choice of outsourcing concerning specific cost categories

 
Thus, among the common reasons that prompt companies to outsourcing are: the need to quickly reduce costs, the desire to focus own resources on strategic opportunities, the desire to systematically raise the level of personnel and business processes.

 

 

 

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