Outsourcing methods and key attributes for success- review of 5 articles.

University Degree Business and Administrative studies

Section 1: Group Summary

Figure 1 below highlights the proposed research objectives for the project:

Preliminary literature review

The 5 selected articles for the review are listed below. Full references have been provided for your reference.

Outsourcing : a primer

This article clearly defines ‘outsourcing’ and why companies are involved in the decision to outsource an organization’s resources. The decision to outsource can lead to competitive advantages for businesses. Firms should consider outsourcing when it is believed that certain support functions can be completed faster, cheaper, or better by an outside organization. Tasks that are not core competencies of the organization are candidates for being contracted out. Today, the outsourcing of selected organizational activities is an integral part of corporate strategy.

This article helps us to establish the advantages and disadvantages of outsourcing as identified in our research objectives. For corporations, advantages of outsourcing are substantial: reduced costs, expanded services and expertise. Outsourcing allows companies to refocus their resources on their core business. Corporations can buy technology from a vendor that would be too expensive for them to replicate internally. On the other hand disadvantages of outsourcing include; the fear of losing control and wrongfully matching needs to what supplier can provide.

The ten outsourcing traps to avoid

This article is key in relation to setting up a Framework for the successful implementation of outsourcing as it identifies ten major pitfalls in outsourcing and gives clear ideas as to how overcome these barriers.

Power et al. (2004) highlights the following ten points as being key reasons for failure, as shown in the table below.

Power et al. (2004) states that through having an excellent understanding of outsourcing and then integrating this into the organisations business strategy and goals leads to advantages of reduction of cost, focus, enhanced quality and reduction in time to market. This article highlight areas that Global Teleco will have to be aware of if they wish to be successful in outsourcing and reaping the benefits from using such a business strategy. This article will also provide guidelines in setting up a framework for the implementation of outsourcing for Global Teleco.

Outsourcing insights from the telecommunications industry

McIvor ...

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Outsourcing insights from the telecommunications industry

McIvor (2003) identifies the drivers and processes that can influence outsourcing specifically within the telecommunications industry. Through the analysis of a company and three suppliers over a period of 18 months, the author provides a real insight to outsourcing and provides a clearer understanding of how to successfully implement outsourcing strategically. McIvor(2003) presents the cause of ‘system integrators’ for such businesses within the industry, seeing the managing and coordinating of a network of best production and service providers. An emphasis on analyzing and using the supply market when outsourcing, rather than attempting to identify core competencies, is argued to have a more significant influence enhancing the competitive position. Strategically, a company should select and manage the most competent source to carry out each operational activity within the value chain that is outsourced. In order to ensure the successful implementation of outsourcing, a cross-functional view is required across the entire company and the external customer.

The findings of the research by McIvor(2003) emphasize the need to ensure cost analysis and collaboration with suppliers in order to overcome difficulties that may be faced when outsourcing.

This article also provides a detailed perspective on strategy formulation, core business definition as a means to identify what activities to outsource and motivating factors for outsourcing. This article therefore presents a clear insight to the telecommunications industry today and how other businesses are doing it.

Trends in outsourcing manufacturing

Ghasi (2002) discusses two key trends within outsourcing: the product life cycle in the marketplace is shrinking due to competition, and secondly, after analyzing a rise in outsourcing to OEM’S, the companies have extended their supply chains

In this article the benefits of outsourcing are covered with a particular emphasis on OEM’S and its advantages in product design or productivity has being discussed. Ghasi (2002) has used industry examples to support his arguments, of which two are most relevant to Global Teleco. These include how to create a value chain, and another highlights how to reduce the time to market and increase volume. He concludes by arguing that manufacturers can go further than outsourcing and follow a collaborative manufacturing approach to add value to the supply chain by ‘doing it faster’.

This article is useful in highlighting the information and techniques of how manufacturers are reducing the associated risk with outsourcing.

Strategic outsourcing

This article identifies pre-outsourcing decision processes and post-outsourcing management as the two key areas that require attention by any company that is interested in outsourcing its business operations to external firms.
This article can aid understanding the requirements and pitfalls of outsourcing.

This article provides a step-by-step approach to implementing outsourcing strategically, as listed below;

These are the key issues to be considered by any company when they are outsourcing, these issues are detailed in this article which helps us in making the decision for Global Teleco.

Secondary Data Measurement

To commence our research we will conduct secondary data research through the use of academic books and journals. By using published data within the books and journals we will find references of further published work in the field of outsourcing to build up our resources to draw on. Our analysis of the data will involve us categorizing data to enable us to identify the key themes, categories, variables and frameworks that are emerging from the research, in a bid to direct our project and meet our research objectives.

Primary Qualitative Data Measurement

We will conduct a questionnaire with Global Teleco to identify how they are outsourcing now. Following this survey we will then conduct semi-structured interviews with other companies within the industry who are currently outsourcing to identify what they are doing, how they are doing it and any challenges they have faced. To analyze the data we will use a theoretical framework established from our secondary data to analyze the answers provided.

Primary Quantitative Data Measurement

Our quantitative data measurement will include a questionnaire incorporating closed questions requiring ranked answers. It will be distributed to companies within the telecommunications industry to identify what they feel are the strongest factors that have impacted on their ability to outsource. This questionnaire will help us quantify what the perception is within the industry from a practical point of view and aid comparison with our theoretical findings.

REFERENCES

Fan, Y,2000, Strategic outsourcing: evidence from British companies, Marketing Intelligence & Planning, 18(4),213-219

Ghasi N, 2002, Trends in outsourced manufacturing-reducing risk and maintaining flexibility when moving to an outsourced model, Assembly Automation, 22(1), 21-25