Difference between Off Shoring and Outsourcing - Assignment Example

Difference between Off Shoring and Outsourcing Off shoring generally means if a country or company plans to move all of its business or some parts out from the current country (residence) to another country so that work can be done there, provided the host country can work on their behalf and according to the instructions and directions. Then this situation is more likely to reflect off shoring. In simple words off shoring is the work carried out or done overseas in which company takes full charge and control. Whereas outsourcing is a different process in which company or country does not necessarily go overseas to carry out their work, but rather can stay and manage their work within the country. In outsourcing usually skills of third party workers are effectively utilized in order to save money. Or in simple words outsourcing is a situation in which someone else (other company) perform the work for the company, while company does not usually have direct control over the work. Usually companies hire other companies (which may be within or outside the country) to do specific work for them or to perform specific functions, services for them, Unlike off shoring in which whole company setup is transferred to another country or some functions of the company (under direct control). Question # 2 Strengths and weaknesses of off-shoring and outsourcing: Strengths of outsourcing: Focus on core activities: it gives company leverage to stick and focus on core issues as a result goals can be set and achieved with not to much concerning about the production. Cost and efficiency savings: outsourcing directly or indirectly helps in reducing cost and saves company’s efficiency in terms of hassles related to production. Operational control: outsourcing helps in muzzling operational controls because at times it is hard for companies to manage operation costs and control while making a product. Staffing flexibility: it gives luxury in terms of managing staff more effectively and in proper direction. Continuity and risk management: outsourcing enables flow of products and services and one can also assess risk if something goes out of control. Develop internal staff: if company’s current employees work side by side with the outsourcing company than skills of staff can be developed. Weaknesses: Confidential data exposing: danger of exposing data which in many ways is fruitful for the company or risk of exposing confidential data. Lack of customer focus: at times outsourcing companies are catering many companies therefore it’s possible that they might not completely focus on your given task or project. Transfer of money to another group: outsourcing leads towards transferring of money to another group. Time management: in case of a poor selection of outsourcing company, valuable time is lost which can be costly for company in terms of completing orders. Off-shoring strengths: Cost effective: off shoring saves money. Diversity: it enables company to be more diversified. Brand awareness across the board: off-shoring may increase brand awareness in the new country. Cheap labor and resources: it enables cheap labor and resources. Money stays within company: unlike outsourcing, off-shoring doesn’t transfer money to another group but rather holds within the company. Weaknesses: Time consuming: it usually requires time to setup in a new environment. Cultural barriers: cultural barriers might disrupt the mobility of work. Training cost: high cost in terms of training. Withdraw the affection of consumers: off-shoring may result in alienating the end consumers. Question # 3: What operational IT and managerial IT systems should you outsource? According to PWC Model Company should always distinguish between core, essential non core and non core operations. Similarly in terms of outsourcing operational and managerial systems of IT one should always consider the above mention theory. If a company is likely to outsource operational services of IT then these services should include networking services, as these services are less likely to come under core services. Networking services consists of providing a server, making a network, choosing type of connection for internet, using or creating Wi-Fi, local area networking for the company. Troubleshooting may also come in this regard. Moreover these kinds of operational services should be outsourced by company in terms of IT operations. In terms of outsourcing managerial IT systems a company should never outsource its core data as in this case heavy losses may come because of the exposure of confidential data. Moreover management of data which is not very much core for the company can be outsourced in order to effectively grow in the market and to reduce cost. For instance data regarding employee’s performances, number of absenteeism, check in time and check out time etc. or in terms of managing their salary details which does not posses any threat to the company if leaked. Question # 4: What issues do you consider when you make decision to outsource? Before taking decision regarding outsourcing, one should consider following important aspects that are likely to create troubles if they are not properly dealt. Credibility of the company: before taking decisions one should consider the credibility factor of the other company so that outsourcing proves to be beneficial. Cost saving: one should look for the companies who are competent in this regard and are cost effective as well. Cultural difference: if outsourcing to other countries than possible cultural differences should also be considered in order to perform work with flow. Potential of the company: one should evaluate the potential of the company before taking decision of outsourcing. Either that company has enough potential to meet the demands and desires of the work. Socio political conditions: one should consider socio political conditions as well if outsourcing work to another country. If the country has loads of problems in terms of socio political conditions that there are eminent possibilities that work flow will be disrupted every now and then which will overall effect the company’s productivity and result in losing revenue in terms of meeting deadlines. Ethical perspective: however another important consideration should be in terms of ethical perspective of the company or country. It’s better to study about the people that you are working with so that one can properly communicate. Language barriers or communication gaps: Another important consideration one should do before taking decision is to device and plan means of communication. I believe in order to explain work clearly communication gaps should be overcome. Question # 5: What support at operational level does IT offer for a business? IT today possesses great importance in almost every walk of life, in terms of supporting business it caters almost every single sector of business. For instance the first and foremost support that it provides is mass coverage to business, no matter what type of business one is doing. Through websites and online retail stores this purpose is very much achieved by companies. Similarly in banking sectors it helps connecting people and performing work on operational level with speed and mobility (examples credits cards and ATM cards machines). Moreover in terms of transportation business IT works as a navigational tool which one way or other helps tracking destination, going on a right direction and saving time and fuel as well. In terms of hospitality management business, IT is providing number of business support for instance different hospitals at present holds the record of the patient and give them card. That particular card helps saving minute details about the patient. For instance if that patient is going for some laboratory test, then only card swapping will give complete details to the person who is operating computer and he is likely to take action accordingly. Moreover ICU units are closely monitored by using IT applications. Furthermore securing premises is also done by IT. Online meeting is another thing that is very much commonly use by businesses which saves time and money. Question # 6 What support at management level does IT offer for a business? One of the main blessings of IT is that it supports management of businesses through number of ways. The first and foremost support I believe is it helps managing the track of staff in terms of number of absents and presents and the time they check in and check out from the office through different systems. This system can also be used in terms of security. However in terms of banking sector its blessings and supports are countless. It helps managing different functions of the banking like keeping data of the account holder, processing it, connecting through a single unit etc. Same data storage situation can be applied in hospitals settings, furthermore in terms of checking whole selling and consumer goods business, it again serves as a manager and keeps track of data, for instance what is in the store and what is not or in a broader spectrum just in time management policy is very much easily practiced through IT. Otherwise it would be hard to track record and keep data manually. In transportation sector it helps managing and tracking fleets. Moreover companies around the world are managing their logistics with the help of information technology. Question # 7 What is knowledge management? How does it help a business? Knowledge management is the efficient ability of the individuals, groups, teams or entire organization to collectively perform or design tasks, or to systematically share, apply or create knowledge in order to achieve the desired goals and objectives. Or in simple words knowledge management is capturing, securing, creating, blending, transferring, distributing and managing of knowledge within the organization in order to perform specified tasks. Knowledge management as far as helping business is concerned, helps mentoring individuals in order to perform their work correctly. Moreover it helps new comers to learn and gain knowledge from the experts. With active user interface a problem can be viewed by group of people and possible solution can very easily and quickly be achieved. Furthermore knowledge management enhances the productivity and increase the speed of doing work. It works as a bridging agent and shares details what other group is doing. Furthermore it saves money and time as if the information is not easily accessible manually or will require hectic efforts. Similarly it helps in competing with other rival companies which one way or other are looking to take edge over the company, for instance if company has manual records and data and does not have knowledge sharing then that particularly company is likely to fail in terms of competing and staying in the market. Question # 8 What is customer relationship management system? How does it help a business? Customer relationship management system generally deals with the functions, operations, methodologies, software and use of capabilities of internet that one way or other help enterprises in order to manage their relationship with customers in a systematic and well organized way. For instance organization today builds the database of customers so that they can facilitate and accommodate them well. Customer relationship management system as far as helping business is concerned provides variety of functions, some important are given below: Increases sales: CRM system helps increasing sales because it anticipates the needs of the customers which are previously taken from history of customer as a result telling organization (managers) what line of action they should adopt in order to increase sales. Cross selling of other products: it helps managers to cross sell other products by specifically highlighting and suggesting products moreover giving customers alternatives as well. Profitability determination: it helps in identifying customers who are profitable and also enlist those who are not giving companies many profits. Product determination: CRM system enables managers to highlight which products are doing well and which products are not doing well in the market. Targeting consumers: CRM system can help targeting consumers by displaying history and possible attributes of consumers in terms of shopping and buying things. Question # 12: What is OLAP? OLAP or on-line analytical processing is a kind of computer software technology which deals with selecting, highlighting and extracting data through variety of point of views in order to provide better understanding by comparing, contrasting or presenting data. OLAP is generally used by managers, analysts and executives in order to gain depth knowledge of data quickly and effectively. OLAP CUBE: OLAP cube at times also known as hypercube because of its potential to deal with more then three dimensions is a kind of data structure that generally allows individuals to analyze data quickly and effectively. The main characteristics of OLAP cube is that it arranges data into cubes and in many way helps overcoming the issue of limited relational databases, as these kind of databases are not very well suited for many kinds of analysis. However one can gain many advantages by using OLAP system for instance one can easily ask for data to be compared and analyzed through spreadsheets showing company’s garments sold in Canada for the month of October, and can easily compare the same line of products that were sold in September in order to determine the profit ratio, or buying patterns in terms of months etc. Bibliography Bhatt, G. (2010). ‘An empirical examination of the relationship between information technology (IT) infrastructure, customer focus, and business advantages.’ Journal of Systems and Information, vol. 12, no. 1, pp. 4-16 Fink, L. (2010). ‘Information technology outsourcing through a configurational lens.’ The Journal of Strategic Information Systems, vol. 19, no. 2, pp. 124-141 Lacity, M., Khan, A., and Willcocks, L. (2009). ‘A review of the IT outsourcing literature: insights for practice.’ The Journal of Strategic Information Systems, vol. 18, no. 3, pp. 130-146 Varadarajan, R. (2009). ‘Outsourcing: think more expansively.’ Journal of Business Research, vol. 62, no. 11, pp. 1165-1172 Read More