Offshioring and Offshore Outsouricing of Digitised Services

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BMAN31000: FINANCIAL ANALYSIS OF CORPORATE PERFORMANCE:
OFFSHIORING AND OFFSHORE OUTSOURICING OF DIGITISED SERVICES
Abstract
In this report, my experiences of designing, planning and managing an outsourcing project on an online outsourcing marketplaces Freelancer will be summarized. Modified version of Cullen, Seddon, and Willcocks outsourcing lifecycle model and some other academic theories were used to structure and guide the outsourcing processes. The objective of this project is to evaluate the feasibility of these theories in managing real-world outsourcing project. Moreover, it provides me an opportunity to gain more practical experience in project planning and management, and have a deeper understanding of the process of outsourcing. During the project, I found that outsourcing can bring tremendous benefits due to its lower labour cost, availability of skilled expert and increased efficiency. Nevertheless, the time zone differences, communication barriers and culture barriers increase the risks of outsourcing. The outsourcing process was delayed by eight days due to inefficiency communication between suppliers on the format of the application. Therefore, the report concluded that developing well-planned risk mitigation strategy, supplier selection strategy and establish good relationship with suppliers are very important to ensure the success of outsourcing project. Contents

1 Introduction2
1.1 Purpose of Project 3
1.2 Outline of Project 3
1.3 Scope of Project 3
1.4 Lifecycle Framework4
1.5 The Reasons for Outsourcing5
1.6 The Reasons for choosing Freelancer7
2 Investigation7
2.1 Decision on Onshoring or Offshoring7
2.2 Decision on type of product to outsource8
2.3 Market Expectations of the Application9
2.4 Competitors of the Application9
3 Target10
3.1 Decision on Outsourcing Type10
3.2 Responsibility in the Project 11
4 Strategy 11
4.1 Risk Assessment and Mitigation Strategies 11
5 Design15
5.1 Specification15
5.2 Specification Blueprint16
6 Engage17
6.1 Selection17
6.2 First Round Selection18
6.3 Second Round Selection 21
7 Negotiation23
8 Operate23
8.1 Management24
8.2 Project Development24
9 Reflection26
9.1 Positive Aspects of Project27
9.2 Negative Aspects of Project28
9.3 Conclusion29
10 Reference29

1. Introduction
Due to the increasing trends towards globalisation as well as the development of modern information and communication technology, both large and small companies tend to outsource part of their business to foreign country in order to increase their competitive advantage under the intensive market competition and tight budget control. Because of this, the outsourcing market has expanded rapidly in recent years. Research conducted by Tomas (2012) shows that the value of global outsourcing market has increased dramatically from $184 billion in 2000 to $389 billion in 2012, and it is predicted that this growth will continue at an average rate of 10% to 15% per annum, reaching $443 billion in 2015. Outsourcing can bring company various advantages such as cost savings, increased flexibility and access to skilled labour (Eunice, 2012). Nevertheless, outsourcing has a high level of unsuccessful rate reflecting in the fact that every year more than 50% of outsourcing projects fail to meet original objectives and around 25% of them end prematurely. Two famous examples of outsourcing project failures include Sainsbury’s IT outsourcing deal with Accenture and JP Morgan’s contract with IBM, which can be attributed to various factors such as the lack of long-term planning, culture and geography barriers, and poor risk management (Cullen, Cullon, Seddon, Willcocks, 2005). 1.1 Purpose of Report

This report aims to provide an in-depth evaluation of the outsourcing...
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