Outsourcing Essay Example | Topics and Well Written Essays - 4750 words

Outsourcing - Essay Example This paper shall begin by defining outsourcing and then describing the different forms of outsourcing. Next it shall outline why organizations opt to outsource and how they select what to or not to outsource. The paper shall then dwell on the advantages and disadvantages of outsourcing from two perspectives: from the point of view of a company and from the point of view of our country, the United States of America. 2.0. Definition of outsourcing Outsourcing has been defined differently by different authors. Overby (1) defines it as the farming out of services to a third party and Lee (323) as the process of turning over part or all of an organization’s functions to external service provider(s). Everett (1) defines outsourcing is a leveraged business model that allows flexible use of the most appropriate resources for a particular project whereas Strassman (51) views it from a completely different angle and defines outsourcing as the distribution of labor and knowledge through specialization. Nevertheless, all these authors concur that outsourcing is deployed for purpose of gaining economic, technological and strategic benefits. Often, people confuse outsourcing with offshoring, which should not be the case. Offshoring, as we shall see in the other sections of this paper is a subset of outsourcing. 3.0. Types of outsourcing There are several types of outsourcing depending on the classification system used. Knowing the classification system and type of outsourcing vendor aides the organization in devising rules of engagement, deliverables and service level agreements. 3.1. Think 180 outsourcing classification The first form of classification system that we... The paper throws light on outsourcing. Overby defines it as the farming out of services to a third party and Lee as the process of turning over part or all of an organization’s functions to external service provider(s). Everett defines outsourcing is a leveraged business model that allows flexible use of the most appropriate resources for a particular project whereas Strassman views it from a completely different angle and defines outsourcing as the distribution of labor and knowledge through specialization. Nevertheless, all these authors concur that outsourcing is deployed for purpose of gaining economic, technological and strategic benefits. Often, people confuse outsourcing with offshoring, which should not be the case. Offshoring, as we shall see in the other sections of this paper is a subset of outsourcing. There are several types of outsourcing depending on the classification system used. Knowing the classification system and type of outsourcing vendor aides the organi zation in devising rules of engagement, deliverables and service level agreements. The first form of classification system that we shall look at has been developed by a firm called Think180. The former looks at the level to which the outsourced function is integrated with company operations, and whether the vendor participates in the meetings and decisions of the business while the latter looks at the entity that receives the results of the outsourced function.