2. INTRODUCTION
INTRODUCTION
A Working Definition of Outsourcing
Services
COMPANY OUTSOURCER
Organization Service
Level Level
Agreement Agreement
Outsourcing denotes the continuous
procurement of services from a third
party, making use of highly integrated
processes, organization models and
information systems.
3. INTRODUCTION
What is Outsourcing?
A Working Definition of Outsourcing
Outsourcing -
“the strategic use of outside resources to perform activities
traditionally handled by internal staff and resources” Dave
Griffiths
Why Outsource?
Provide services that are scalable, secure, and efficient,
while improving overall service and reducing costs
7. Advantages of outsourcing
Cost Skilled Time zone
Effective Expertise difference
Increased
Focus on core Distribution of
productivity
competencies risk
and Efficiency
Improving Better
Access to
customer people
world-class
service management solutions
8. Disadvantages of outsourcing
Loss Of Threat to
Hidden Security and
Managerial
Costs Confidentiality
Control
Tied to the
Quality Bad Publicity
Financial Well-
Problems Being of Another and Ill-Will
Company
lose talent
Lack of
inside within Linguistic
customer
your barriers
focus
company
9. Problems with outsourcing
• Loss of Control
• Increased cash outflow
• Confidentiality and security
• Selection of supplier
• Too dependent on service provider
• Loss of staff or moral problems
• Time consuming
• Provider may not understand business environment
• Provider slow to react to changes in strategy
10. Types of outsourcing
• Business process outsourcing (BPO)
BPO is a subset of outsourcing that involves the contracting of
the operations and responsibilities of specific business functions
or processes to a third-party service provider.
11. Types of outsourcing
• Knowledge process outsourcing (KPO)
KPO describes the outsourcing of core business activities, which often are
competitively important or form an integral part of a company's value
chain. Therefore KPO requires advanced analytical and technical skills as
well as a high degree of proprietary domain expertise
12. Types of outsourcing
• Legal process outsourcing (LPO)
LPO refers to the practice of a law firm or corporation obtaining legal
support services from an outside law firm or legal support services
company. This process has been marked by the practice of outsourcing
any activity except those where personal presence or contact is
required.
13. Types of outsourcing
• Recruitment process outsourcing (RPO)
Recruitment Process Outsourcing is a form of business
process outsourcing (BPO) where an employer outsources or
transfers all or part of its recruitment activities to an
external service provider.
14. Types of outsourcing
• Engineering process outsourcing( EPO)
EPO offers global consulting and outsourcing services
providing end-to-end services in the areas of Engineering and
Technical Process Outsourcing.
15. 1970s to early 1990s 1994 to 1998 1999 to 2001
2001 to
present
17. • 40% to 50% of the top 500 companies in the world is leveraging
on outsourcing for most of their business processes.
• current figures values this robust industry to a staggering $20
billion USD.
• On an average global outsourced projects involve about 28% that
belong to the hardcore IT sector, 11% to finance sector, 15% to sales
and marketing and 9% from administrative sector. The remaining 22%
belong to many other different sectors such as consumer distress
calls, general data segregation jobs, tourism etc.
