Outsourcing Report. Objectives are: To conduct a literature review on various trends in outsourcing during the past ten years. To analyse and understand the winners and losers in outsourcing. To explore more into the

Tie ups with financial well-being of another firm:

 As the outsourcing company turns over a part of their operation of business to outsourced company the company will be in financial tie up with the other company. There are chances that the outsourcing company can go bankrupt and leave the other company with nothing.

Ill will and Bad Publicity:

If outsourcing is implemented in a community by employing friends, relatives and neighbours then it is good. This is because in the losing the job because of shipping them across the country or state, then outsourcing will generate bad3 publicity. If a part of the operations of the company is outsourced then it will sufficient enough to affect the morale of the remaining work force.

CHAPTER -3

LITERATURE REVIEW ANALYSIS AND DISCUSSION

According to Green and Henderson (2010) the outsourcing market can be divided into four main subsets namely: Business Process Outsourcing, Platform IT Outsourcing, Network Infrastructure Outsourcing and finally Application and Systems Outsourcing.

3.1. Business Process Outsourcing (BPO)

        According to Taylor (2007) business process outsourcing includes all repetitive, finite processes like pay roll processing and other processes that include the performance of highly complex methodologies of business that are tailored to customer’s needs. The BPO sector is further subdivided into three sub sectors. They are transaction based, business methodology, and vertically focussed outsourcing.

3.1.1. Transaction based outsourcing

        Green and Henderson (2010) defines transaction based outsourcing as the “designation of operational responsibility and authority of a single, narrow and repetitive business function to a third party vendor, who in turn, accepts responsibility for achieving a predetermined, specific level of service.” the client usually has little or no strategic interaction with the day to day operations of an outsourcing vendor. In that case the transaction based outsourcers assume the whole responsibility of the business process operation. According to Amiti and Wei (2004) this type of outsourcing has got very important influence on the acceptance of outsourcing. The ubiquity of the internet has helped this concept to be propelled, as vendors have an alternative delivery channel that is better equipped to support with cost effective solutions for medium and small sized firms and thus providing clients more visibility for business functions. One of the strongest reasons why transaction based outsourcing is becoming prominent is the internet. Payroll processing is one of the common examples of transaction based outsourcing and automatic data processing. The companies value add depends on its capability to process non-core but vital payroll transactions at a cost saving between 20 percent and 40 percent to its clients. Payroll outsourcing helps companies to focus more on capital.

3.1.2. Business Methodology Outsourcing

        Green and Henderson (2010) suggest that this type of outsourcing provides “the transfer of responsibility and ownership of an organization’s entire department functionality, including human capital, assets, technology, business methodologies and processes, to an outsourced provider.” The vendor supports with maintenance, management and optimization with the entire infrastructure. Moreover, the high volume of customized nature of business methodology outsourcing shows a greater level of strategic involvement by the client towards accomplishing the outsourced function’s goals. Just like transaction based outsourcing, business methodology outsourcing has also gained reputation in the market. Many companies really struggled with outsourcing vital business functions, especially the one with customer interaction like call centres. Anthes (1991) suggests that the end users of outsourcing have now realized the importance of outsourcing functions that are not central to the company’s mission. Some of the departments that fall into this non-core area are sales desk, product support, human resource administration and market research. Most of the companies have now outsourced these departments as business processes and technologies converge more explicitly. An example of a company whose services include both business methodology based and transaction based outsourcing is Affiliated Computer Services. It has transformed itself over the last couple of years from data centre outsourcer to leading provider of robust process and transaction based outsourcing.

3.1.3. Vertically focused outsourcing

        Green and Henderson (2010) defines it as the ”designation of operational authority and responsibility of business processes to third party vendor, who in return provides an industry specific solution and accepts the sole responsibility for achieving a predetermined specific level of service.” This concept of vertical specialization has now converged with all types of software providers and services. Even though there a number of other broad horizontal outsourcing functions those are effective without vertical customization such as data storage or payroll most of the outsourcing vendors will add industry specific attributes to their solutions. Green and Henderson (2010) further suggest that vertically focussed vendors are capable of offering more tailored solution than horizontal oriented vendors through several areas. They are:

• Extremely Effective Sales Process: By giving attention to a specific vertical area, the outsourcer can leverage its expertise throughout the process of sales by generating an understanding of key industry specific business issues and solutions which drives the return on investment to the vital decision makers. Moreover, a vertical oriented outsourcer can supply more references to clients that may need similar solutions.
• Efficient Methodologies and Business Process: A vertically oriented outsourcer can rapidly scale the company business by creating efficient processes specific to that typical industry. Industrial experience helps outsourcers to quickly and easily thrive over the learning curve while providing efficient and effective solutions at the same time. Higher margins can be created by the vendor through the usage of high efficient and robust business methodologies and processes.
• Highly tailored solutions: A vertical expertise outsourcer is capable to leverage its previous expertise and troubleshooting the know-how to provide more tailored solutions. An example is the call centre customer service for companies in telecommunications industry.

Ashe (1996) suggest that a vertically focussed unit of outsourcing should support the outsourcers with unique opportunities, especially within that particular vertical. Industries like healthcare that absorbs big legislation initiatives through health insurance, finance sector, telecommunications are all some examples of verticals that will benefit from outsourcing.

The BISYS Group is one of the leading providers of investment and information outsourcing solutions to the financial sector. It can be considered as a vertically focussed customer. With respect to the company’s strategy of providing financial services outsourcing solutions, this company has three lines of business: information services, investment services and insurance and education services. The company generated 40% of its revenues from mutual fund administration services like business management, transfer agency, legal and compliance support, fund accounting and shareholder servicing. This firm also provides automation of core banking, loan processing as well as automation of insurance sales processes.

3.2. Platform IT Outsourcing

Green and Henderson (2010) defines platform IT outsourcing as the” service provider who assumes the responsibility for managing all or part of a client’s IT infrastructure.” The platform IT outsourcing relationship should be customized to reflect the client’s IT needs and the agreements should often align IT and operations with the client’s business strategy. Some examples of Platform IT Outsourcing are onsite and offsite support services, hardware facilities management, server vaults and data security and disaster recovery facilities. These relationships includes transfer of it facilities hardware and staff.

Avery (2000) comments that in the past, the capability to focus on core competencies, cost cuttings and rationalized operations all added to the company’s decision to outsource its IT functions. Nowadays, employing cutting edge technology that supports company’s strategy has become very crucial to the success in changing quickly. Moreover, the tight labour conditions have made it a real challenge to attract, invest and retain necessary technology based expertise and human capital. Companies who find it extremely difficult to keep pace on their own have now made use of the help of third parties to manage their technological infrastructures.

Electronic Data Systems Corporation is the current largest IT outsourcer by a big margin. According to IDC they captured over twenty five percent of $25.7 billion IS outsourcing market in the year 2008 while accomplishing a healthy 16% growth rate in the same year. EDS is organized basically into four lines of business: Information Solutions, E Solutions, Business Process Management, and A T Kearney.

3.2.1. Application Outsourcing

According to Green and Henderson (2010) Application outsourcing can be detailed as “an outsourcer that provides the management, maintenance and support of software applications.” Within the application outsourcing category, there exists a typically included single type of application service provider or ASP. So, As a result the application outsourcing segment has now two sub sets, third part ASPs and proprietary ASPs.

3.2.2. Third Party ASP

According to Green and Henderson (2010) third party ASP is a third party service firm which manages, deploys and remotely hosts the software application developed by a third party through centrally located servers in a lease or rental agreement. However, the third party ASP delivers the functionality of non-proprietary software to the client through a centrally managed remote service, thus assisting in the relationship between the client and the Independent Software Providers. ASP is responsible for the general functionality of the application, but unlike some other outsourcing relationship, it is not responsible for how efficiently the client uses the software or the results the client gets from it.

Corio, Inc. is a leading application service provider that integrates, implements and manage a suite of third party applications. It is an excellent example of third party AS that has managed to achieve stability throughout the short evolution of ASP industry. This company manages a suite of software applications that provides customers enterprise resource planning, e-commerce capabilities and customer relationship management as well as applications specific to the industry.

3.2.3. Proprietary ASP

The underlying difference between third party ASP and proprietary ASP is intuitive. Green and Henderson (2010) comments that the third party ASP acts as an intermediary between the client and the software vendor while the proprietary ASP develops, owns and rents its own software solutions directly to the client. The proprietary ASP gets tremendous advantages through the ownership of the software it provides which includes the creation of barriers to entry as well as high gross margins. The delivery method and pricing model provided by a proprietary ASP is very similar to the third party ASP.

3.4. Systems and Network Infrastructure Outsourcing

According to Green and Henderson (2010) a systems and network infrastructure outsourcing can be defined as “a third party service provider who can proactively provide or manage IT applications and infrastructure through a remote hosting environment.” Some examples of the services provided includes an array of technical functions like co-location, performance monitoring, hosting, firewall intrusion detection services and backup data storage. Most of the hosting companies battle for commoditization.

3.4.1. Domain Focus Segments

The continued success of outsourcing provides tremendous opportunities across different subsets of the outsourcing industry. The three major domains that have been significantly impacted by the outsourcing phenomenon are the call centres, electronic transaction processing and human resources.

3.4.2. Call Centres

Green and Henderson (2010) defines a call centre can be defined as a” dedicated environment capable of handling both inbound and outbound telephone calls via sophisticated and specialized communications equipment.” The nature of interaction with the customer falls under a wide range of activities like order entry, sales, billing, help desks, account maintenance, scheduling, service dispatch and directory assistance. It is only viewed as an expense necessary to retain customers. But call centres are now considered as a critical point of customer contact which can affect the company’s short term profitability. Feenstra and Hanson (1996) visualize that a positive and personalized customer interaction can often enhance customer retention, increase the chances of cross selling and upholds competitive differentiation. The importance of customer interaction is not as difficult as many companies have kept their call centres in house.  Many companies have observed the success of others who have outsourced their call centres. Moreover companies find it extremely difficult to manage human capital and complexities in IT internally. As a result the trend towards call centres has gained its momentum. IDC found that world-wide call centres market outsourcing, implementation, consulting, support and training which will reach about $ 84 billion by 2012 representing a twenty four percent compounded annual growth rate. Another figure shows that fifty five percent of the call centres services market will be in the healthcare, telecommunications and financial services vertical. All the former three verticals have got high degree of customer contact and are transaction intensive sectors. However, they have now gone through an industry wide regulatory change. Combined with this and other globalization trends many companies with these verticals have now outsourced their call centres.

Call centres overwhelmingly rely on telephone for customer interaction. As the internet based technologies have now slowly begun to creep into the call centre environment, the ubiquity of telephone will ensure that it will remain as the key channel for communication in the short term. Data monitor found out that over eighty four percent of the interactions are made over the telephone and expects that percentage to decrease to sixty four percent in 2012. However, the phone based enquires on an average takes long time to complete, this method of communication is favoured by customers even though it is expensive when compared with other internet voip calls. As a result companies have now started to highly invest in equipment and technology that supports and provides more lower cost, productive and internet based contact channels. Call centres are now in best position for dominating in the market and are responding to the changes in preference of customers by offering, tightly integrated, consistent, excellent customer services and infrastructure that supports a complete customer profile and transaction history without depending on channel choice of service.

Wireless communications has also contributed well to the call centre market. Help desks are now beginning to use wireless device by adding another channel to the multifaceted infrastructure for communications. Moreover companies that provide on-location service will soon have the capability to provide feedbacks to customers directly from a remote location. Advances in technology like this have created great opportunities for IT outsources and service providers who are in the call centre service space.

Convergys is a leading provider of outsourced services within the software segment and billing services as well as in other call centre service segments. This company handles more than one million contacts every day through its 28000 workstations and controls customer interactions that range from product information requests, product sales, account activation, billing queries and complaint resolution. They also respond to technical queries for installing of products and highly complex network configurations.

3.4.3. Electronic Transaction Processing

It is very difficult to estimate the relevance of electronic transaction processing systems as it has touched all parts of human lives. Point of service payment processing, depositing pay checks in employee’s accounts, transferring funds into customers account are all examples of transactions that are settled electronically. Shifting away from paper based transactions is becoming more comfortable with electronic payment forms. This concept is expected to be highly promoted by financial institutions and vendors based on the cost savings it provides to them.

Green and Henderson (2010) says that the costs savings and the persistent push towards a paper economy have propelled even the governments. Perhaps, even the governments have now moved away from paper based transactions and have helped electronic transactions to gain momentum and credibility. The customers demand for transactions that are processed safely and rapidly. This makes technology surrounding electronic transaction to be more complex, expensive and time consuming to maintain. As a result more companies are now going for transaction based outsourcing model. The financial services industry has now accepted it due to its better consolidation within the industry.

Eliott and Torkko (1996) suggests that credit and debit card outsourcing services is a major contributor to growth in outsourcing services in the last couple of years. Security is one of the significant aspects of electronic transaction processing. Despite there are large number of opportunities to shop online, security concerns deter consumers from considering electronic payment methods due to fraudulent activities over the cyber space. Recent incidents of hacking have unnerved many online shoppers. IT software and service providers have now become more proficient in providing security solutions.

Checkfree Corporation is leading provider of B2C electronic transaction processing. The company serves around five million customers and 144 merchants that include nine of the top ten banks. One of the most compelling reasons to choose Checkfree’s services is that it guarantees to pay anyone, anywhere. They also promise delivery of payments to smaller organizations and individuals.

3.5. Human Resources

According to Fontagne (2009) the human resources functions include “all transactions and process based activities that are related to the design of an organization as well as procurement and support of human capital within the organization.” Responsibilities that commonly fall under human resources include policy development, organizational design, corporate communications, payroll, recruiting, training and development and employee record maintenance.

Laabs (1993) suggests that majority of the firms have now started to outsource transaction based processes like payroll and benefits administration. This activity of outsourcing process based activities like human resource administration has increased as those processes have now become more complex and unmanageable. The frequently changing regulatory and legal employment requirements, tax reporting systems are examples of recent changes in human resource space which has led to the outsourcing trend in this area.

Fontagne (2009) further states that the integrated human resources administration benefits both the client and the vendor. Vendors gain increased margins that come along with ancillary services, while clients get benefitted from improved process performance, reduced costs, standardization of business and easier contract management. There exists large scale opportunities among the human resource outsourcers to provide scalable, integrated and comprehensive solutions.  One of the major trends in human resourcing outsourcing space is the addition of internet into its solution. By using internet as a delivery channel or as a resource for information companies can reduce costs by encouraging self-service applications. These applications help the employees to have more control and visibility over their personal information while decreasing the time for information requests. As the trend towards web based applications grows vendors are likely to increase the functionality to improve the involvement of employees, thus pushing more responsibilities to the employees itself. Outsourcing companies that think about the future will always identify the efficiencies and advantages that could be gained by integrating human resources with financial processes and accounting. As an example methodologies and technologies used in the payroll management process is marked very similar to the payables and receivables process. According to the statistics generated by Gartner group the world wide expenditure for outsourcing human resources was $ 46 million in 2008.

Exult Inc. is a newcomer to the human resource administration market and is a very good example of a firm that gives strategic, high volume and customized outsourcing services. They offer wide-ranging web enabled solutions that are designed to outsource, automate and enhance the efficiency of the human resource business processes. Through a good combination of web based technologies, process expertise and economies of scale. This company examines the HR business process of the client and reengineers these processes and methodologies to reduce client inefficiency and further improves service levels to employees. Some of their service offerings include employee record and data management, organizational and employee development, policy and legal compliance, human resources strategy, training, labour and employee relations, payroll, recruiting and benefits administration. Exult has got an impressive client list that includes Bank of America, Unisys, Tenneco and BP Amoco.

3.6. Impact of Outsourcing on the IT Industry

        The greater interests in outsourced services presents a set of potential challenges for both traditional projects based IT services and software companies. There are enough opportunities for everyone to thrive during the long term. The increased penetration by the outsourcing firms will change the landscape that it will force both services and software firms to adjust their interactions with the customers. According to Crow and Muthuswamy (2009) some of the challenges include the following:

• Change of IT Purchasing Decision makers: in circumstances where a large outsourcing company makes inroads with a corporate customer, there are chances that they will likely become the IT purchasing decision makers- not the customer behind. As a result, the process of managing the accounts will change as people purchasing the services will have their own agenda for broadening their reach in the account. Both the software companies and the service providers need to convince the outsourcer that they offer the best solution to the client. Due to the very large size of any outsourcers, they need to make the buying decision on a national basis, which would be definitely problematic for small regional companies. The other side of this equation is that the companies selected by outsourcers as partners can potentially receive pull through of the product and services on a very large scale initiative.
• Potential for Lowering Bills: consulting companies that sub contracts work through an outsourcer might find huge pressure on bill rates. The relationship between the project based company and the client could preset margin stacking issues based on the nature of work and the role of the outsourcer in managing that work in relation with the broader IT objectives.
• End to end Vs Best of Breed: The major objective of the outsourcing firm, especially the large platform outsourcers like EDS is to own as much of the client that is possible. As a result, they position themselves as end to end players who can handle majority of IT requirements for their customers. The niche oriented project based firms are faced with high competition from outsourcers and they may find it very difficult to win large projects. While, the smaller project based firms have to continually refine their offerings and area of focus so as to compete efficiently within these accounts. The capability to differentiate oneself as a best of breed within a certain domain, technology platform, and vertical industry is a necessity to maintain dominance in these accounts.

• Importance of Vertical Focus: Virtually every major outsourcing company is aggressively pursuing go to market strategies that are centred around key vertical industries. Their main goal is to move far upstream as possible to offer high value added solutions tailored to the business process present within the selected verticals. Outsourcers are clearly looking out for partners with the vertical expertise to solidify their business knowledge. So, this trend remains as a threat and opportunity depending on how the company is positioned in the market space.
• Recurring Models of Revenue: Even in these stiff current economic conditions, many outsourcing companies have improved or sustained their market valuations due in large part to their recurring revenue models. Wall Street places a premium on the predictability of earnings and revenue, especially during the time of economic downturn. As a number and variety of outsourced revenue business continue to proliferate, business models that have evolved around the sale of consulting projects and software licences could be seen as less valuable than their outsourcing rivals. Due to this many of the major software and IT service companies are looking for how predictably they can build their revenue mix. Software and services companies that are seeking to create value should always take into concern building recurring of revenue into their net offering. This results in software companies to aggressively move to a proprietary ASP model.

3.7. Emerging Trends in Outsourcing

        Based on the specific research conducted by the Outsourcing Unit of the London School of Economics and Political Science the following are the major trends that are likely to develop over the next few years. This analysis points to about eleven major trends that will shape the global sourcing and impact on the non BRIC activity for the next few years. The report also provides an insight into the fact that the recent economic downturn will have mixed impacts on this trend.

Trend 1: The rise in spending on outsourcing markets- ITO will be over taken by BPO in the next few years

        According to the study, the global BPO market grew faster than ITO market in the last couple of years. In the year 2008 the world-wide ITO market was estimated to worth between $220 and $250 billion. On the other hand the BPO market was quite less. The estimate for ITO market for the next five years clearly shows that by will grow by 6-9% per annum while the BPO expenditures are likely to grow by 10-15% a year from $145 billion in 2005 to about $230 billion by 2013.

Trend 2: The growth of Multi-Sourcing

        Even though the spending on ITO and BPO services are increasing every year, the average size of individual contracts and duration of contracts are decreasing. So, this study claims that the client organizations are actively looking out for more multi-sourcing. It has always been a dominant model and the net growth is driven by the client organizations, signing contracts with more suppliers. Moreover, multi-sourcing allows clients to access the most suitable suppliers and avoid the risk of frequently relying on a single supplier. This increases the transaction costs as the suppliers should frequently bid because the contracts are for very small duration and the supplier’s faces a stiff competition.

Trend 3: Changing role of India

        There are significant evidences that both the EU and US clients initially used suppliers from India to provide technical services like platform upgrades and programming. When the relationships matured, clients assigned more tedious tasks to suppliers in India, which includes support and development task for critical business functions. The three leading suppliers from India expressed their wish to continue these high valued tasks like knowledge process outsourcing and research and development. At the same time Indian and to a small extend China, Russia and Brazil are experiencing heavy pressure to increase wages. This has resulted in huge labour turnover rates. However, both China and India are increasing the offshoring of BPO and ITO works to other countries.

Trend 4: The promise of China

        In the year 2006 China invested $1423 billion in its BPO and ITO markets, more specifically in communication and information technologies so as to secure and ensure its position in outsourcing/offshore services. China’s future in ITO/BPO is expected to be very strong. It was estimated by the Everest group that Chinese offshore services was only $2 billion in 2006 and is predicted to be rowing at a rate of 38% annually to reach around $8billion by 2012. Moreover, many client organizations are suspicious of China’s ITO and BPO services. Cultural and language barriers along with the fear of losing intellectual property remain big stumbling blocks for many firms in EU and US.

Trend 5: Emerging Competition among Countries

        Along with India and China suppliers from all the continents will develop centres of excellence. The organizations in Europe and US will increasingly outsource business and IT services to suppliers located in close proximity, with less time zone difference and low transition costs than the Asian markets. By the end of 2009 the central and eastern European ITO market exceeded $5 billion, with Russia exporting over $4.6 billion of business and IT services.

Trend 6: Returning to Software as a Service

        Based on the reports in 2002 many firms were not interested in renting applications, infrastructure and services over the networks. Most of them already had ASP product offerings, in-house expertise and they were looking out for customized services and to source stable provides, not the risky start-ups. Majority of the analysts thought that ASP passed away with the dot com burst but there are many reasons to think that firms will always reconsider ASP for targeted activities, not least as it evolves into software space as a service.

• Big organizations need net native applications that are only available through ASP delivery.
• Many organizations are ready to get rid of their high costs proprietary suites for very cheaper ASP alternatives.
• ASP providers thinks that most of the customers prefer customized services and the need for those services increase the service providers viability so that they can generate profits by charging for value added services.

Trend 7: Outsourcing aids Insourcing

        As the firms become smarter with outsourcing, they also become very good at insourcing. In house operations face a very stiff competition in almost every are and can never assume that they can retain their monopoly place in the organization. Because of this, all the in-house operations are adopting the techniques available in the market. But, insourcing will be affected by the shortage of talented professionals within the developed countries, particularly for IT skills. All the research reports suggest that Western Europe and U S will suffer a shortage of domestic IT workers in the next ten years. UK will be experiencing a shortage of 715000 workers by 2012, while US is predicted to a shortage of 17 million skilled workers by 2025. France, Germany and Spain will reach 3 million while Italy with 2 million short.

Trend 8: A strong trend-Nearshoring

        Nearshoring can be defined as outsourcing the work to a supplier located in a lower wage foreign country very close in time zone and distance. When compared with offshore outsourcing, the benefits of Nearshoring incudes cultural affinity, less travel costs and less time zone differences. Most of the Nearshoring studies reveal that the distance matters and the point to customers choosing nearshore option is to gain benefit from one or more of the following attributes of proximity: temporal, geographical, cultural, economical, political, linguistic and historical.

        The Eastern and Central Europe is the nearshore destination for Western Europe. According to research reports of Deutsche bank in 2006 the imports of IT services from Central and Eastern Europe to Western Europe increased at an average of 13% per year between 1992 and 2004. This kind of growth is comparable to the import of IT services from India, which averaged 14% per year over the same time period. Moreover, the clients from Western Europe are attracted to Eastern and Central European suppliers for same reasons as the Us customers gets attracted to Canadian suppliers like cultural understanding, geographical proximity, minimal time zone differences, common language and very low labour costs.

Trend 9: Increase in Knowledge process outsourcing

        Knowledge process outsourcing is outsourcing of market, business and industry research. This outsourcing requires critical amount of analytical skills and domain knowledge. Even though the KPO market was quite small in 2009, the industry experts are predicting a huge growth for it in the next five years. Some estimation shows that KPO will be 17 billion by 2012, employing about 35000 professionals world-wide.

Trend 10: Captives-Selling and Building

        It is widely recognized that the Western firms are setting up sites offshore, there is an emerging trend called the GE Effect. General electric established its first captive centre in India in 1997. In the year 2004 GE sold 60% of its centre to two equity companies. After a year, the name of the centre was changed and now it is the top 10 BPO/ITO service providers in India. With a virtual captive centre in India, the company owns the physical operations, but the work forces are employed by a third party supplier. The captive centre offers best of both the worlds-the supplier is equipped to develop, attract and retain the local talent and the client still maintains the strategic control.

        There are many examples of companies in the US selling their captive centres. The outsourcing survey conducted in 2007 found out that selling the captive centres is an important trend that exists now. Among the respondents of the survey 487 companies had captive centres in India and Philippines and 45% of these firms were actively looking out to sell these captive centres.

Trend 11: Successes and disappointments of outsourcing

        According to the information collected by outsourcing unit, it is found that for the next few years 70% of the sourcing deals will be considered as extremely successful. The clients will be spending between 15-60% of their operating budgets on outsourcing works, sometimes to many suppliers. On the other hand it is estimated that only 40% of the big deals that includes complex processes represent 80% of the operating budgets will be successful. The rest 30% will have mixed outcomes and 30% will be undergoing failures. Moreover, the economic downturns have brought in deep impacts on the above trends. By the beginning of 2010 there was clear evidence of client behaviours observed during the previous economic slowdowns.

• Tardy decisions on projects.
• Amalgamating vendor relationships.
• Postponing decisions to commit new contracts.
• Looking out for dramatic cost cuttings.

All this means that providers will need to be wise in controlling costs, financial planning and innovation, both for clients and themselves. The providers also need to be innovative with how they add value in contracts.

In the beginning of the economic slowdown some firms took radical measures to cut costs and work force and hold existing and new projects on fire. The rest continued to invest in their long term strategy, though they do this at a slow rate. The study further reveals that outsourcing and offshoring markets will remain dynamic both for non-BRIC and BRIC countries.

3.8. Future of Outsourcing

Outsourcing has now become a well-established standard around the globe and its gauges are it is still hanging on. The availability of cheaper technology, highly educated workforces that are mobile and the urban connections with high bandwidth forms the trend of outsourcing, which has just blown up during the period of last ten years and shows no signs of dwindling in any time soon in future. The trends in outsourcing are now shifting imperceptibly. According to Smith (2009) one of the most crucial fact that is to be thought of while thinking about outsourcing is that the cost of production is relatively very high in the western countries. This forces the works to be outsourced to low cost economies like India, China and Brazil. However, this fact is true whether the company is outsourcing the manufacture of furniture or producing 3 animations. Outsourcing helps the companies at times when there is necessity to cut cost and upgrade production.

        One of the most common trends that is getting up formulated now is domestic outsourcing. Very highly complex and sophisticated projects are now managed by a project manager in a studio by utilising the skills of locally available freelancers for a small period of time on project. This is how value is added to the boom in outsourcing. Moreover, companies who are now thinking to take a very long term burden of hiring people can create highly skilled and efficient team of people locally using shared software which can give them more flexibility in adjusting the service and volume on a short notice without disrupting the day to day running of the company. As cloud computing had revolutionized storage of data and computation for firms who don’t have to incur much expenditure on hardware now, share software like Tender 3D can use human resources without even looking out for the traditional costs of hiring people for a job.

        Smith (2009) comments that majority of the companies are now trying their best to rationalize their work forces and reduce the risk in the current economic situation. This means two things for outsourcing. First, most of the firms will have few staff and more number of freelancers who were made redundant quite recently and are looking out for more freelance work. Logically this means that firms will look out for freelancers to take the slack. This will help the firms to minimize their risks by trusting the local suppliers rather than outsourcing the work to a different time zone region.

        It is quite true in fact that in future the management of projects wll be outsourced to professional project managers who are dealing with the shared system who will then outsource the projects to a trusted team of professionals. In this way every link of the chain is controlled by an expert in their respective areas of project. Thus, it creates a highly flexible and effective network of delivering projects from any place around the globe.

3.9. Winners and Losers of Outsourcing

        According to Gorg (2003) even the very hardest critics of outsourcing firmly agree that it can benefit the organization as a whole. After all the organization won’t opt buying over making unless it saves at least some money. But in most of the certain conditions, outsourcing can advantage the very narrow interests of the firms and hurt the broader vision of the nation’s economy. According to Shirhattikar (2004) outsourcing gives two social benefits that too on two conditions. Firstly, resources and workers who are dislocated because of outsourcing should find new opportunities somewhere in the economy. Secondly, outsourcing should not sweep that it will lead to direct competition among worker but rather it should complement the tasks of most of them. All the facts regarding both the above conditions shows light on the fact that outsourcing benefits the organization that do it as well as the economy as a whole.

        Shirhattikar (2004) further states that any increase or gain in production through outsourcing or through any other mechanisms can always lead to the fact that some workers in the firm might loose their jobs. But, on the other hand if a firm can produce products at lower cost, it will be in a position to sell more of its products and eventually end up in recruiting more workers for their jobs. For example, the increased productivity gains in manufacturing personal computers haven’t eliminated jobs in the IT industry even though the jobs shifted away from computer manufacturing to providing computer related services.

        According to Bury (2009) outsourcing always helps organizations to produce more cheaply. However, the stiff competition between the companies that are outsourcing will reduce the prices of their products and services. However, consider the case that the healthcare and insurance companies reduce their expenses by outsourcing their back office operations. The consumers will have to spend more money on their goods, which will in turn help jobs in other industries.

        However, outsourcing and offshoring has gone too far now. Shirhattikar (2004) argues that firms that reallocate parts or all of their production in low wage countries have contributed to an ever rising pool of unemployed workers. Due to globalisation, wage inflexibility a great deal of unemployment is created instead of gains from business. The main losers of outsourcing are the low skilled manufacturing workers in developed countries. Many people think that the winners of outsourcing are the owners of the firms that outsource. This is totally based on the assumption that outsourcing does not include fixed cost. When the outsourcing companies have competitors and the fixed cost of outsourcing is minimal, it is clear that the firms cannot be always the winner. If the domestic wages are flexible international outsourcing by home companies can worsen the welfare of the home nation and drastically reduce the profit of all the companies in the industry. A wage subsidy may reduce the range of outsourcing and improve the welfare. On the other hand, if the wages in the home country is rigid then outsourcing is welfare improving for the home country.

Outsourcing happens only if the foreign country is a low wage economy. Anything produced in the foreign country can be done only by a firm that can establish a factory abroad to take advantage of the low wage there. Bury (2009) states that when the wage in the foreign country goes below the home wage, all the firms will have the instinct to outsource their works so as to maximize their profits. But if the wage difference between the home country and foreign country is very small and the wage reservation at home is low then the social welfare will definitely fail. This main reason for this is that the increase in the consumer’s surplus and the profit of the company are not at all enough to compensate the loss in workers surplus at the home country. Firms always prefer foreign labour over domestic labour due to the very low foreign wage rate. From the view point of social welfare of an advanced country, the actual labour cost in the home nation is not the high wage there, but is the disutility of work. To summarize, outsourcing may not be always welfare improving.

CHAPTER-4

CONCLUSIONS AND RECOMMENDATIONS

4.1. Conclusion

        The study and analysis done on various existing and emerging trends in outsourcing was extremely helpful in understanding the diverse perspectives of outsourcing. Initially, outsourcing was viewed as process taking place only in the IT sector. But this study helped me in a lot in finding out that outsourcing cover very broader areas other than IT like human resources, knowledge process, call centres, network infrastructure and third party outsourcing. All these ones are the existing trends in outsourcing and have evolved during the past fifteen years. One of the most crucial emerging trends in outsourcing is the domestic outsourcing. This method provides opportunities to work for a very large number of freelancers and moreover helps the outsourcing company to earn huge profits.

        However, the study initiated with a group effort by analysing and understanding the exact concept of outsourcing. Each member of the group was assigned a task after the first meeting itself. These task involved activities like researching on the evolution of outsourcing, countries involved in this process and the beneficiaries of this process. In the following meeting, all these researched materials were discussed in a brain storming session to understand more about them. Every member of the group contributed well to this initiative. This helped us in understanding the main concepts of outsourcing and why companies prefer to outsource in house work. With many studies, we could identify that the countries like India and China are getting major benefits from outsourcing. Majority of the outsourcing companies are located in US and Europe. Companies opt outsourcing works rather than doing them in house, mainly because of the lack of availability of skilled professionals, huge expenses involved in that like infrastructure and resources. Outsourcing helps companies to give work to some other companies abroad at a cheaper price than developing them in house and gain huge profits out of them. On the other hand, there are several risk associated with outsourcing like it pose threats to the confidentiality and security of the outsourcing company, loosing managerial control, lack of good quality and reduces the morale of the in house team. In fact the advantages that outsourcing brings in for the outsourcing company is extremely huge when compared with these minor risks.

        There are several other discussions throwing light on the fact that outsourcing works can lead to loss of jobs in the home countries. When analysing on one side it is true, but this can bring in strong benefits to the economy as a whole owing to the profits gained by the outsourcing company. Nowadays many firms are establishing outsourcing centres in home countries itself. This can reduce the disadvantages related to difference in time and culture. The statistics generated by a survey conducted in US clearly shows that many of the nationals are losing jobs due to outsourcing and at the same time, the profits from outsourcing are boosting up the US economy. This might create a dilemma for the government whether or not to support outsourcing.

        The entire course of dissertation work was extremely helpful in learning more about outsourcing and gaining hands on experience on various management skills. Time management was very crucial as the work had to be finished in a limited time frame. This was done by dividing the work into various phases like understanding outsourcing, evaluating the benefits and risks of outsourcing, analysing the existing trends and finally researching more into trends that are probable to develop in near future. This helped a lot in organizing the research materials and scrutinizing them very well to draw good conclusions. However, in many occasions the time limit set for each phase had to be passed due many reasons. Group dynamics also played a very key role in finishing this work. The discussions and analysis made within the group helped a lot in understanding more about outsourcing and generating new ideas on outsourcing. Moreover, the group study helped out in enhancing the management skills a lot. This includes interacting with group members, problem solving and communication. Even though there were many limitations among the team member to organize meetings quite often, a meeting was scheduled every week to discuss various aspects of research and ensure that the work is proceeding without any stumbling blocks.

        Overall, the whole duration of this dissertation is a good time to cherish ever in life as many new skills and knowledge was gained through the whole process. The helping mentality and sharing resources among quite few team members was an added advantage of our group. This helped out a lot in drawing up conclusions on the study very faster without much hassle. The brain storming sessions were really helpful in understanding the subject well and this process stimulated the thinking capacity of all the group members. On the other side, the initial guidance given to us by the supervisor was quite motivating to finish this research work in time. Solving up problems and blocks that came across while researching on various articles was a good experience and this would definitely help in future while getting involved with various management roles. To summarize, Outsourcing has now become an essential part of most of the firms in the West owing to the tremendous advantage that it can bring into the firm that does it.

4.2. Recommendations

        Based on the literature review and analysis conducted on outsourcing there are many factors that a firm needs to take into consideration while outsourcing their work to an outside company. According to Smith (2009) the contract between both the parties are very critical for the success of outsourcing. Some of the recommendations based on the study are:

• Viability of Operation: Majority of the companies around the globe outsource their works for saving costs and optimizing tasks. The processes that are outsourced will of extremely important for the company. So, one of the main analysis the company has to perform is to details all the activities and points of the outsourcing process and identify the major issues. For example to outsource payroll it is extremely important to define the payroll dates and cycles, validations and security of data.
• Costs: The short term and long term costs, risks and investments always generate a tendency to balance towards the outsourcing process. Commonly, the figures used for reference is the bid price of the provider but firms should always mind that this is not the cost of outsourcing but the external cost. However, the firm must be aware that several other internal costs will also be incurred which must also be assessed and added to the vendors bid price. Mostly, the incorrect assessment of internal costs will lead to failure of outsourcing.
• Risks:  Two types of risks should always be assessed. The first one is what the firm must do in the event that the provider stops rendering the service. Some precautionary measures for controlling this type of risk is by selecting providers with reputation and who have an extremely solid customer base or based on the mitigation or transfer back plans the provider can offer. Above all, there should be a chance to get the information at once and to make a transition to another provider in a realistic timeframe. The second risk is the possible errors that could be made by the provider and the subsequent impact it may create for the firm. Contrary to this type of risk, outsourcing offers more assurance than in house operations. As an example in HR outsourcing, if a mistake is generated by payroll operator, there is always a contract at service levels to control the existing relationship and rapidly respond to the generated impact.
• Providers and Offers:  Many providers present a multitude of offers with different services, scopes and implications for the internal costs. As a result it is very difficult to separate it for generating an even comparison. The major tasks that the person in charge performs are request for proposals, setting up a standard procedure for evaluating, comparing and selecting a provider who meets the essential criteria’s.
• Change Management: Most of the departments in a firm need not be globally dispersed and their structure will be simple. So, the change management associated with outsourcing does not normally generate any problems. More usually this kind of transformation occur in a company when they need some change like migrating to some other information system, management changes and recruiting professionals. However, change will play a crucial role in assuring fine transition.
• Understanding regulations: It is always essential to take time in understanding how the new regulations can affect the operations. This can help a lot in saving resource, time and money.
• Always limit information to what is being requested:  Manufacturing firms should always take care that providing more information than what is requested is unnecessary. More information needs more time for review and may not improve the quality.
• Timely and regularly communication with Project Managers: All the outsourcing companies needs to keep track on how the vendors are working on their project regularly. This helps in finishing the work in time without much errors and problems. Regular feedbacks and review sessions can create vigour in the mind of the vendor and help in producing quality product within a short span of time.
• Learn from the failure and success of others: All the outsourcing firms’ needs to be proactive and remain in constant touch with the market. This can help out a lot in finding out the providers who are not performing well and outsource the tasks to other successful vendors. Moreover, analysing the outsourcing strategies adopted by other firms can also be helpful in formulating the plans and policies.
• Meet the Provider: It is extremely very important to meet the provider physically before entering into a contract. Meetings that are well run and carefully planned can help in understanding the requirements of both the parties. However, teleconferencing is an option when face to face meetings are not possible. Meetings help a lot in understanding each party’s needs and standards. In all possible cases it is very vital to conduct a face to face meeting.
• Written Contracts: There should always be written contracts between the outsourcing and the outsourced company. This document should cover the following: a) locations where the product is developed/ manufactured. b) Specific product or services that are shipped to the contract facility. c) Responsibilities and duties of each participant. d) The condition and manner of shipping. e) Product segregation. f) Commitment   to inform holders of licence regarding deviations and errors. g) When and how the contract facility is properly audited.

References

• Amiti, M., and Wei, S.-J. (2004a) Demystifying Outsourcing: The Numbers Do Not Support the Hype Over Job Losses. Finance and Development (December): 36–39.
• Anderson, M.C. (1997), A primer in measuring outsourcing results, National Productivity Review, Vol. 17 No. 1, pp. 33-41.
• Anderton, R., Brenton, P. (1999). Outsourcing and low-skilled workers in the UK, Bulletin of Economic Research 51 (3): 1-19.
• Anthes, G.H. (1991), Outsourcing may be only answer for many, Computerworld, Vol. 25 No. 12, p. 51, 54.
• Arnold, U. (2000), New dimensions of outsourcing: a combination of transaction cost economics and the core competencies concept, European Journal of Purchasing & Supply Management, Vol. 6 No. 1, pp. 23-9.
• Ashe, D.S. (1996), Take this job and outsource it, Mortgage Banking, Vol. 56 No. 8, pp. 89-93.
• Avery, G. (2000), Outsourcing public health laboratory services: a blueprint for determining whether to privatize and how, Public Administration Review, Vol. 60 No. 4, pp. 330-7.
• Baily, M. N., and Farrell, D. (2004a) Exploding the Myths about Offshoring. McKinsey Global Institute Available at: www.mckinsey.com/mgi/reports/pdfs/exploding_myths/explodingoffshoringmyths.pdf. [Accessed 14th November 2011]
• Bers, J.S. (1992), Outsourcing: a deal or dilemma for FMs?, Facilities Design & Management, Vol. 11 No. 3, pp. 54-7.
• Bienstock, C.C. and Mentzer, J.R. (1999), An experimental investigation of the outsourcing decision for motor carrier transportation, Transportation Journal, Vol. 39 No. 1,pp. 42-59.
• Bhagwati J., Panagariya J. & Srinivasan T.N. (2004). The Muddles over Outsourcing, Journal of Economic Perspectives 18 (4): 93-114.
• Blumberg, D.F. (1998), Strategic assessment of outsourcing and downsizing in the service market, Managing Service Quality, Vol. 8 No. 1, pp. 5-18.
• Bryce, D.J. and Useem, M. (1998), The impact of corporate outsourcing on company value, European Management Journal, Vol. 16 No. 6, pp. 635-43.
• Bury, S. (2009) Outsourcing separates winners and losers. Available at: . [Accessed 12th November 2011]
• Crow, G. and Muthuswamy, B. (2009) International Outsourcing in the IT Industry-Trends and Implications. Communications of the International Information Management Association, Volume 3 Issue 1.
• Elliott, T.L.I. and Torkko, D.E. (1996), World-class outsourcing strategies, Telecommunications, Vol. 30 No. 8, pp. 47-9.
• Elmuti, D. and Kathawala, Y. (2000), The effects of global outsourcing strategies on participants’ attitudes and organizational effectiveness, International Journal of Manpower, Vol. 21 No. 2, pp. 112-28.
• Feenstra, R. C., Hanson G.H. (1996). Globalization, Outsourcing, and Wage Inequality, American Economic Review 86 (2): 240-45.
• Fontagne, L. (2009) Outsourcing, Competitiveness and the labour market: Losers and Winners. Paris School of Economics.
• Gorg, H. (2003) Winners and Losers: Fragmentation, Trade and Wages Revisited. research paper series, Globalisation and Labour Markets, Research Paper 2003/41
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• Grossman G. M., Rossi-Hansberg E. (2006). Trading Tasks: A Simple Theory of Offshoring, NBER working paper, 12721.
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• Laabs, J.J. (1993), Why HR is turning to outsourcing, Personnel Journal, Vol. 72 No. 9, pp. 92-101.
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• Shirhattikar, G. (2004) Future winners and losers in Global Outsourcing. Chazen Web Journal of International Business.

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• Wood A. (2004). North-South Trade, Employment and Inequality, Oxford Clarenton Press.

        

Reflective Report

Introduction

        The entire duration of writing this thesis report was a good learning experience altogether. As outsourcing is one the most common trend that sprouted up by the end of the 20th century, it has got more room and space to flourish in the coming years as the world economy is growing day by day. Many dimensions of outsourcing were researched while working with this thesis report. The major research areas were the benefits and disadvantages of outsourcing, the drivers of outsourcing, the most common trends in outsourcing, the impact of outsourcing on the IT industry and the future of outsourcing. Based on the analysis and study of the collected research materials, recommendations and suggestions were formulated. The main method adopted for collecting the research materials was secondary research. In secondary research, the information is gathered from various sources like journals, books, articles, internet, newspapers, digital libraries etc. all these research materials were written by some authors based on the primary research they have conducted in the past.

        After the data was collected from various sources, it was scrutinized based on the relevance to the topic. All the relevant articles were further studied and paraphrased to write up the report. The information collected from diverse sources helped a lot in understanding the exact concept of outsourcing and the areas it can cover as a whole. Many new trends in outsourcing were identified through this study. However this study has got some limitations like the major focus of the study was directed to the outsourcing trends in the IT industry. This is because; the outsourcing works started in IT industry at first, which then later spread across other industries. One of the most common trend that is more about to come in future is domestic outsourcing. It has got a tremendous way to go in future as this gives employment to many freelancers within the home country itself. The group dynamics helped a lot in research work and writing up this thesis report. Many new things were learned through this group effort like: how to get involved in a group discussion, how to motivate other members to contribute towards the work, how to brain storm to get new ideas etc. All these experiences will help a lot when we undertake a future management job.

Recollection of Experiences

        A log of all group and individual activities was maintained right from the start of the dissertation work. This helped a lot in formulating new strategies and responding to the problems that aroused in the group in a systematic manner. After the initial induction session for the dissertation work, all the group members met to discuss on the topic and the areas that are worth covering to add to the thesis write up. Everybody participated in this meeting with great vigour and contributed well. It was then decided that the group will meet every week to keep track of the dissertation work. Then forth, in all the weeks, we discussed on various aspects and dimensions of outsourcing. In the first meeting we discussed on what outsourcing is and how it evolved quite rapidly at the end of the last century. We also had a discussion on the circumstances that lead the companies to think about outsourcing. This discussion helped us a lot in getting an initial knowledge and developing the base for writing the thesis. Every week we learned a new concept in outsourcing. On further weeks we discussed on the trends in outsourcing, the advantages and disadvantages of outsourcing and the future trends of outsourcing. Every member used make a note on all the things that were discussed during the meetings. This helped us a lot in writing recommendations and suggestions and draw up conclusions from the study.

        However, on many occasions there were many internal crises within the group. This rooted up due the unavailability of research resources for some team members. At times we all got stuck, while looking out for more information. But, this problem was solved by using the digital library well. Many of the articles from the digital library were really useful in analysing the recent trends in outsourcing. On the other hand, one important thing that is worth mentioning here is the hard working nature of majority of the group members. Those members were really helpful in supporting the weak and guiding the weak members. The collected materials were shared for preparing for team meetings. These materials formed the central core of discussion of each team meetings. New perspectives of analysis were obtained after the discussion of each material. Our thoughts went and analysed beyond the study materials. This aided a lot in understanding the works clearly and precisely. The guidance of the university librarian was really helpful in collecting relevant journals and articles for the study.

Personal Feelings and Learning from Experience

        In totality, I feel extremely proud and contented with the work I have done and the contribution I have done to the group. In fact the process of doing the thesis work as a group is good but on the other hand, it benefits only quite few members in the group who are hard working. If the work had been more individual, the quality would have been much more better. There are several pros and cons on either side. Group works are good to collect and analyse information, when all the members actively participate in them. The inactivity of few members created a bit small kind of issues in our group. I honestly think that I have contributed well to all the group initiatives and discussions. This was done by participating in all the meetings, researching materials and by actively participating in every discussion. However, the activity of brain storming helped even the inactive members to think and respond to the subjects that were discussed in the meetings.

        The topic that was allocated for the dissertation work has got good relevance in the existing market situation. As all the western countries opt for outsourcing works to gain more profits, the economies like India, China and Brazil gets benefitted from them due to the low wage pay in those economies. However, new trends in outsourcing were learned and analysed with the group activity. I have personally taken utmost care to help the weak members in the group and contributing to the discussions well by doing relevant preparations beforehand. Areas of discussion were mailed to every team member for proper analysis. These preparations would make the team members to contribute good ideas while discussing the subject. Moreover, in my personal point of view the process would have been much more better if all the team members sat around the table in a supervised environment. There existed a lack of supervision to the entire process and it has badly affected the morale of many of the students. Any group work without proper supervision will be a definite failure. Despite of all these drawbacks many hardworking students have done well by carrying the work in their own way with limited or no group activity. Apparently, the inactivity of few team members has affected contribution of some of the members who were indeed willing to do their best for the group. To summarize my personal experiences, it is very important to state here that a supervised environment is essential and unavoidable for the entire process of the thesis.

Group Dynamics and Learning from Experience

        Group activities were initiated right from the first meeting onwards. Majority of the group members were satisfied with all the activities of the group from the beginning itself. However, the inactivity of some members really affected the proceeding on some occasions. But the contributions from the rest members helped to solve the issues very quickly. We shared the contact details of every team members after the first meeting itself. This helped all of us to keep in touch with each other at all levels of the work. The minutes of every team meeting was written and maintained and this was mailed to every member frequently. Moreover, the agendas for every meeting were set before hand and were mailed to all members with the supporting documents. This systematic approach helped us a lot in keeping track of the work process well.

        A Gantt chart was use to keep track of the all the task allotted to each team member after the meetings. This methodology helped us a lot in finishing the task in time. Helping hands were always offered to team members who found the process very difficult. But only very few responded to the offers and the others remained inactive. At times we all faced the problem of getting relevant articles for discussion and analysis. The guidance that we got from the university library helped us a lot in solving this issue without much hassle. Moreover, digital library facility was used well to get research articles from various authors. As stated before brain storming was the common methodology we used to generate ideas and discuss them. All the active team members contributed well to those sessions. This helped us a lot in understanding the exact perspective of articles.

        Few of the group members always took a defensive and inactive approach from the start of the work. This really affected the group work initially but as the rest obtained the flow the work things went easily without any problems. Everybody listened carefully to the inputs of other team members during the sessions. These inputs were debated well to generate good conclusions that supported out research work. Heated up discussion were done on various aspects of outsourcing which helped all of us to understand the topic well. However, the lack of proper leadership was clearly noted in the team.  Only very few members were willing to take responsibility initially. Gradually everybody got adjusted to the proceedings and started taking very small tasks. Guidance and helps was sought from the university library for help in research and even the senior students were contacted to ensure that the process went well without any flaws. The group process helped all of us to establish good rapport with other members and create an environment of discussion and analysis without many tensions.

        Every member of the group considered and treated other members with great respect. This was a good policy that helped us to resolve issues when heated up debates took place. However, the inactivity of some member turned things upside down quite often. The empathetic approach we followed to solve the problems was really good and as a result we could get honour from all the rest team members. Regular review meetings and follow ups were done to ensure that everybody does their part well. The group discussions centred round the areas that were mailed beforehand to all. These group discussions were really effective in reaching general conclusions on the topic.

Lessons for Future Projects

        I could personally learn many things through the group work and the individual initiatives I have undertaken. They are:

1. Problem Solving: Several aspects of solving group and individual problems were learned from this dissertation work. There were occasions of tensions among the group members. These problems were solved through my personal initiative by dealing with both the parties empathetically. Surviving group problems were very critical as this was a group oriented work to certain extend. Individual problems like unavailability of supporting research articles, lack of sufficient time etc. were solved by following a systematic and phase to phase approach. The help from the university library was so great.
2. Group Interaction: I could learn well to interact in a group through this work. Moreover, I could convince the group members, my exact point of view in every discussion with sufficient background proof. The research works that were conducted before each group meetings was helpful in this regard. I could also offer helping hands to team members who were really weak with the work. Brain storming sessions were really helpful in generating new ideas and it enhanced the thinking ability of all the group members. I could also enhance my ability to take up roles voluntarily. When new ideas came in while discussions were on, I used to take initiatives to further progress with them and make the process lively. Moreover, I could easily gain knowledge in how to effectively look out for research materials. This could help me while preparing research reports in future.
3. Time Management: Managing time is very vital towards the completion of any project work. Gantt chart was effectively utilized to keep track of the task allotted to each team member. This helped us to finish tasks in time without many tensions. In fact I adopted a phase by phase approach to study. It started with initial study on outsourcing and its advantages and disadvantages which was followed by the study on recent trends in outsourcing. However, special focus was given in IT sector. This approach of phase by phase helped me to finish the work in time. There were occasion when many thoughts aroused whether the work could be completed in time due to the unavailability of research materials. But this problem was solved by effectively using the digital library.
4. Writing Skills: I could improve my writing skills through this work. New methodologies and techniques of writing were learnt. This would really help me while preparing any future project reports. Paraphrasing the articles and documents were vital as they contributed more towards the thesis write up. New structures, verbs and styles were learnt while preparing the report. However, writing thesis reports that conveys the ideas precisely is very important. I learnt how to write down the exact concepts and thoughts so that anyone reading the report can easily understand them.
5. Communication Skills: Even though I have got plenty of opportunities to enhance my communication skills while ding course works, I think this was the best occasion where I could effectively utilize them. I could improve my oral and written communication skills a lot. Writing up the minutes of the meeting, preparing Gantt chart and scheduling team meetings helped me in this regard. Now onwards I could effectively coordinate a group activity without much hassle. All the team members responded well to my initiatives and this makes me feel proud about the hardships I have taken to organize group activities.

Conclusion

                The analysis and discussion conducted for preparing the report was really helpful in understanding outsourcing and its concepts. New emerging trends in outsourcing were learned. However, the risks and threats that outsourcing poses to the home country was quite surprising fact for all of us. We could conduct a strong debate on the advantages and disadvantages of outsourcing. This was effective in identifying the core aspects and strategies of outsourcing. Brain storming sessions were useful in generating new ideas and really enhanced the thinking capacities of the team members. Furthermore, the preparation of Gantt chart and minutes off the meeting helped us to organize the activities well. Overall, the entire activity was a learning experience for all the group members.

        We could evolve ideas on effectively managing time and resources. Time was very crucial for all due to very limited span of time. At times we made the group meetings very short and precise as all were busy with other course works. However, all the activities kept on moving without any big stumbling blocks. The contributions from some group members are worth mentioning as they have contributed well. The staffs in the library were so helpful in guiding us to find the right article. Digital library was of great help to all. We tried our best to incorporate the current newspaper based articles to our study. These articles were so helpful in finding out the major trends in the outsourcing and its prospects in near future.

        Even though the group lacked a good leadership, the individual initiatives taken by few members were really helpful in solving issues that came up instantly. Supervision was one of the major things that the work lacked. It was because of this some members took the work lightly and went down to a dormant stage leaving the responsibility to quite few hardworking members. New styles of writing the report and expressing the findings were learnt through this process. We all had a discussion on how the report should be structured and what key concepts the document should hold and discuss. This was in a way good that all of us got an idea on how the thesis should be presented.

        As concluding remarks, the entire process was helpful to all the members in the group to organize the research work effectively and efficiently. Many new skills were learnt and existing skills were improved and enhanced. We all were able to interact well with other members and establish a long lasting relationship with them. One of the most unforgettable skills that we have gained through this work is the time management. The systematic approach we adopted helped us a lot in finishing the work in time. Moreover, we would ever cherish these happy days of group activity.