Outsourcing TALAL Kanoo Keith Miller Joel DAMitier

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Outsourcing TALAL Kanoo Keith
Miller Joel DAMitier
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What is outsourcing

• Outsourcing is the allocation of tasks or jobs
  from the internal productions to an external
  entity
• Getting certain jobs of the company done by
  people who are not actually part of the company.
• It is a form of globalization, ideas from one
  country is spread to another country through
  jobs.
• Outsourcing is focuses on reducing cost.
• .

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History of Outsourcing

• Early Civilizations
• People often bartered for goods which they could
  not produce themselves with nearby towns or
  countries
• Led to the first commerce
• Considered first use of relying on an outside
  source for products
• This concept underlines modern outsourcing
  practice.

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Industrial Revolution

• Major corporations outsource
• some operations
• Insurance
• Architecture
• Engineering
• Mainly in the city or country of the corporation
• No real global markets had emerged

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Post World War II

• Major Nations are now more connected
• Result of the war effort and exporting of
  supplies
• Marshal Plan
• Emergence of global market place
• More access for developed countries to Asia and
  other developing regions
• Cheap sources of labor
• Manufacturing and consumer industries begin to
  outsource operations

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Modern Era

• Manufacturing jobs becoming increasingly
  outsourced
• Major technology companies such as Boeing and
  Intel are outsourcing major operations
• Software development
• Now a major cost reduction
• strategy in many
• areas of business

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The US and outsourcing

• The United States is the leading nation in
  outsourcing.
• The US is trying to develop itself from a
  manufacturing state into a service state.
• Many businesses are moving out of the country,
  mostly into more populated developing nations
  such as India, China and Mexico were everything
  is cheap.
• First companies to outsource were toy companies
  in the U.S to Japan.

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Current Outsourced Jobs

• Customer service Call Centers
• Tax preparation
• Accounting
• Software Engineer
• Manufacturing
• Radiologist

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Advantages

• Reduce overhead cost
• Enables companies to slim down operations
• Allows focus on
• core competency
• Gives an outside
• perspective on the market where a business
  operates
• Allows access to large range of data and
  expertise on target demographics or regions

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Disadvantages

• Loss Of Managerial Control
• Bad quality
• Threat to security and privacy
• Loss of employment
• Communication problems
• Bad Publicity or Bad Press

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Facts

• Over 500,000 jobs have been outsourced since the
  year 2000.
• An additional 250,000 jobs lost due to
  outsourcing.
• The most companies being outsourced are IT
  companies.
• About 71 of Americans are concerned with the
  trends of outsourcing jobs to foreign countries
  that will affect their job security and earning
  potential.
• The number for jobs that are expected to be
  outsourced to India, China and other parts of the
  world over the next several years is about 3.3
  million jobs.

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In-sourcing

• Opposite of outsourcing.
• Refers to a delegations of a particular job and
  getting it done through the existing resources of
  the company instead of external resources.
• It became common recently as many businesses
  where not experiencing satisfaction with
  outsourcing.
• Has been used in areas such as production to
  reduce costs of taxes, labor and transportation.

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Conclusion

• It is a wise marketing strategy in term of
  reducing costs.
• It can help business learn more about markets.
• Provides third world nations with huge
  populations with jobs.