BUILDING A BETTER BUSINESS WITH OUTSOURCING Nancy Mann Jackson; Growth Strategy, Entrepreneur 2015 PRESENTORS NITESH KHATIWADA ROSHAN PANT SONI SAHANI ADITYA KUMAR JHA SANGITA LAMA Presented to Dr. Dhruba Lal Pandey Nepal Commerce Campus Minbhawan; Kathmandu

PRESENTATION OVERVIEW (OBJECTIVES OF THE ARTICLE ANALYZED) INTRODUCTION VARIABLES DISCUSSED WHAT ARE OUTSOURCED? DECIDING WHETHER TO OUTSOURCE? PROS AND CONS WITH OUTSOURCING? FINDINGS CONCLUSION

Outsourcing What is Outsourcing? Outsourcing is a strategic decision to give a task or activity to an independent contractor who determines how best to do the task or activity. The firm and the independent contractor become partners and may establish a long-term relationship. Examples of outsourced activities: IT, HR, Legal services, Manufacturing, R and D. Note:not just manufacturing but many more are outsourced today

Sourcing Decisions Single sourcing: Choosing a single supplier Multiple sourcing: Choosing several qualified suppliers Cross sourcing A sourcing strategy in which the company uses a single supplier for a certain part or service in one area of business, and another supplier with the same capabilities for the similar part or service in another area of business.

Coming to the Article Most entrepreneur despite having potentiality fails sometime for many reasons One of them is that they can’t devote time in all aspects of organizational work So the trend of outsourcing has increased Workload are being shifted and managers can focus on core task of business Important aspect is “what is to be outsourced” and “when to outsource?” Fruitful result are achieved on matching between what the business wants and what the provider specialize in

VARIABLES DISCUSSED When to outsource? Finding the right contractors Locus of Specialization (What to outsource?) When to outsource? Finding the right contractors Control over Work Performed (How to make Contractors work?) Costs of Activity (How to count the cost?) Quality of Work (Challenges of Outsourcing) Reaping the Benefits

When to Outsource Right time differs as per business New projects Employees can’t handle day-to-day business Further growth of business

Deciding Whether to outsource? (OUTSOURCING CONSIDERATION) These days any task can be outsourced Sometimes there are things you don’t want to do but they are important for your core business Don’t outsource that you don’t want to do it

Deciding Whether to outsource? (OUTSOURCING CONSIDERATION) Come to a decision What is core to the business and the future of business? What can bring competitive advantage? Decide what to outsource (MAY BE)Highly skilled or executive, expertise Highly repetitive tasks Specialized knowledge

Deciding Whether to outsource? Contd…………………… Find the right contractors Reliable outsource provider Your own network Online networks Placing ads Request for proposal Professional association or trade group Virtual market places

Deciding Whether to outsource? Contd…………………… Choose a partner(contractors) Make a match between what the business wants and what the provider specialize in Use incentive to motivate the outsourcer to focus on what is most important to you Lay out requirement and expectations in the beginning

Pros and cons With Outsourcing Lower labor costs Low investment risk On - demand talent: product development and management skills available if not found in-house Time-to-market improvement: Products can be launched closer to the point of consumption Introduction of new and legacy products in new markets is more efficient, because of local familiarity with the market.

Pros and Cons With Outsourcing Potential security problems Identifying qualified and reliable suppliers Disruption of supplies Low product quality Difficulty in protecting confidentiality Provider may not understand business environment Too dependent on service provider

Findings Source: http://www.statista.com/topics/2257/business-process-outsourcing-industry-worldwide/

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CONCLUSION Vendor’s service offering are evolving Demand for more value by customer to vendors More concentration on multi-vendors management Will be influenced by Global Economic Condition Continued growth in the industry

Thank You!