Outsourcing

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All About Outsourcing

Outsourcing can be defined in many ways. A definition from the Guide to Outsourcing in Supply Chain Management states, “We can define outsourcing as the process of moving aspects of your own company to another supplier” (169 Scott, Lundgren & Thompson, 2011). Ethanan Helpman from Harvard University defines it as “to refer to the acquisition of goods or services from an unaffiliated party” (127, Helpman, 2011) and Ashsiha Oza and Kathy Hill from Sam Houston State University define it as “turning over all or part of an organizational activity to an outside vendor” (15, Hill & Oza, 2007). Based on these definitions, outsourcing is the hiring of a third party to help with business. When discussing outsourcing, there are advantages and disadvantages along with a process that is followed when choosing a company to work with.
Outsourcing is something that has both advantages and disadvantages just like anything in life. One advantage of outsourcing is that it can, as Forbes.com authors Michael Heric and Bhanu Singh discuss, “tap into global talent” (1, Heric & Singh, 2010). Having a department in which a company is unable to find qualified employees can be a problem but outsourcing allows the company to now have these people at their disposal so the company can grow. Today companies are outsourcing the IT department to India and China due to the amount of engineering graduates from these countries (17, Hill & Oza, 2007). These graduates are very knowledgeable of the IT field and having them work on a website, server issues or anything else related to IT would help the company greatly.
Another advantage is that it “builds partnerships” (1, Heric & Singh, 2010). When building these partnerships the company needs to make sure that they don’t just give the “3rd Party Logistics (3PL) provider” (169, Scott, Lundgren & Thompson, 2011) all of the work with no direction but instead give directions and be involved with



Cited: Casale, F. (n.d.). The new outsourcing from outsourcing to outcompeting. Business Week, Helpman, E. (2011). Understanding global trade. Massachesettes: Harvard University Press. Heric, M., & Singh, B. (2010, June 15). Outsourcing can do much more than just cut costs. Retrieved from www.forbes.com/2010/06/15/outsourcing-capability-sourcing-leadership-managing-bain_print.html Hill, K. L., & Oza, A. (2007). Outsourcing to india: Advantage or disadvantage. Proceedings of the Academy of Information and Management Sciences, 11(1), 15-19. Retrieved from http://www.sbaer.uca.edu/research/allied/2007/Information and Management Sciences/4.pdf Pyzik, K. (2012, April). The pros and cons of outsourcing.Internal Auditor Magazine, 21-22. Scott, C., Lundgren, H., & Thompson, P. (2011). Guide to supply chain management. London: Springer-Verlag. Troutner, T. (2012, July 26). [Web log message]. Retrieved from http://ivn.us/2012/07/26/olympic-uniform-controversy-an-independent-perspective/

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