Worrying Trends for the Global Outsourcing Industry - Term Paper Example

?Worrying Trends for the Global Outsourcing Industry Worrying Trends for the Global Outsourcing Industry Affiliation Introduction Outsourcing is a new emerging trend round the globe. The term ‘outsourcing’ is used for the contract between two organizations to offer services that an organization can otherwise perform using its own corporate resources. However, it is a fact that a lot of organizations either multinational on national contract or outsource their jobs like electronic mail services, call center services and payroll. Additionally, these services are divided among different organizations that are well experienced in providing service facilities. In addition, these organizations are sometimes located overseas (Thompson, 2011; Turban, Leidner, McLean, & Wetherbe, 2005). In other words, outsourcing is an instance, where some government officials allow criminal persons to obtain license of driving. Since, it involves various security interests, economic effects on the country and political safety issues. That’s why analysis of those trends is necessary, which are affecting the outsourcing industry (Mintz, 2004; Chopra, 2010). Although majority of people has agreed that outsourcing results in creating more jobs at home since organizations are acquiring a lot of benefits from outsourcing aspect. Thus, this trend results in developing extra human resource power. Conversely, occupational dislocation factor along with collective costs survive that ought to be measured well earlier than the development. Hence outsourcing trend warns the long-term feasibility of our trade and industry system as well as the overall educational network (Mintz, 2004; Flecker, 2009; Yakhlef, 2009). Additionally outsourcing is not an ideal trend and trouble-free solution for a corporation. Thus, it is absolutely essential for a corporation to analyze each and every variable of outsourcing before they make choice to utilize this tool for rapid development. Moreover, there are numerous issues associated with outsourcing that could lead a business towards failure. Thus, there is need to assess the profiting margin that is expected from the outsourcing. There are various worrying trends or key issues that organizations can face in outsourcing. Following are some important issues: (Mintz, 2004; Chopra, 2010) Worrying Trends or Issues in Outsourcing When we talk about the issues that organizations can face in outsourcing, it is not single one to define. There are lots of issues which need to be discussed. However, one of the most important issues is barriers or basic difficulties that organizations face during outsourcing. Additionally, there are also some non financial issues that include differences in allocation of time regions (for instance, country trimming is different from other countries), variation in language spoken from one country to another is also a key factor, unpredicted civilizing variations in addition to the requirement for information safety are the most important issues that an organization face during outsourcing. According to a research, organizations in United States merely accumulate more than 15% that is equivalent to those funds that might be obtained through outsourcing locally to an economically depressed area (Mintz, 2004; Chopra, 2010). Expenditures and Cost The most important aspect that organizations must consider before outsourcing is that they have to be familiar with variations in a number of concealed costs related to outsourcing. Typically these costs may be forgotten by representatives, particularly when they are making a deal with any outside firm. Therefore they must adopt such trends which enforce to plan strategy about the legal expenses during signing deals (Mintz, 2004; Chopra, 2010). Quality Assurance Quality of product is a most adoptable step that most organizations think about before outsourcing. Additionally, organizational executives are always aware of fact that quality insurance is such a hotspot which will become a first priority of organization in today’s changing trends round the globe. Therefore it is major requirement to adopt careful procedures that are necessary towards achieving products’ quality. In this scenario, an important perspective that they must remember is that which organization fulfills their requirements and what sort of organization is most suitable for it. It is seen sometimes that some people adopt economical way out that can cause problems for them and this sort of arrangements does not guarantee quality work (Mintz, 2004; Chopra, 2010). Task Assigning In the above paragraphs we have discussed various issues which are important at their own way but one more critical issue for the organizations is about “what sort of tasks or responsibilities should be assigned for outsourcing”. In fact, a lot of organizations have completed critical outsourcing core organizational functions e.g. accounting and other clerical service. Hence it can be said that the performance aspect in a lot of organizations that are involved in outsourcing either internationally or locally cannot be achieved before the outsourcing. Additionally when organizations consider outsourcing it is seen that the reserves are not essentially as vast as they think about them or as they look like; in addition to the reserves that they acquire might not have significance that impacts the consumers’ requirements. In this scenario, if we compare outsourcing with additional business trends, we will see that outsourcing perspective can only be adopted by a decision of individual organization. Moreover adopting outsourcing would not guarantee to generate enough money in a short period of time (Mintz, 2004; Chopra, 2010; Davies, 2010). Post-agreement Procedures The outsourcing perspective is not lemmatizing in some issues researchers and analysts observe a lot of key factors that result in disturbances during outsourcing. However basic understanding about outsourcing may include issues related to crisis that occur due to deficiency in mutual understanding and conclusions that are not easily understood. Additionally in simple words it can be said that the customers along with service enablers’ do not want to make arrangement in their work or they are not ready to make a mutual effort later than agreement is operational. Thus these applications are not performed according to those standards which are defined in agreement. Hence this activity results in frustration among client and stakeholder and creates problems in completion of activities. Therefore the whole planning for acquiring business related profits turns out to be a dream (McCray, 2008; Bell, 2006). Moreover the key aspects in this issue also include possible sensation and performance modification that approaches through outsourcing. In this way explanation requires must be fulfilled in a proper way along with understanding that is a major reason for other problems. Hence it can be said that these issues are occurred due to the better management of advance processes that needs to meet the standards of requirements (McCray, 2008). Lack of Understanding among Client Leaders One more key issue that survives during the process of outsourcing is the deficiency of buy-in from senior leaders who are beneficiary of the services that provides outsourcing nationally or internationally. Moreover, various researches have shown that a lot of group executives who acquire new services are not in a position to contribute energetically in the outsourcing assessment or acquire proactive interactions concerning its status. Thus it results in energetic or submissive confrontation to the whole outsourcing structure and it takes a corporation toward failure (McCray, 2008). Adopting Latest Trends If we talk about the issues and forget to mention the aspect to adopt new trends according to varied requirements of the user is just like a time wasting. As time is changing day by day and technological advancement in information technology (that affects outsourcing a lot) results in modern trends. In addition, global market is expanding and services are provided from distant locations have their own importance but sometimes it is seen that end user insists on new methods that are not mentioned or defined earlier. There are several reasons for that but the important perspective towards the end user is the outsourcing supporter wants to get profits rapidly, which are linked with business on the other hand, it needs modification in process, technological trends, performance measures and recruitment of human resource (McCray, 2008). Civilization and Communicational Issues Cultural conflict between consumer and service enabler is a very important issue in outsourcing. However in this era where worldwide economical situation is quite different either at national level or when we talk about regional culture. In addition, corporate culture could be different from client and service provider’s perspectives and it can include different standards in terms of style, speed, decision making and organizational arrangement (McCray, 2008). One more feature of possible business or organizational cultural clash is the facts of communication in provisions of distinct inhibitors, variety of languages that are used for the communication at national or international level. In this scenario, this aspect of language either verbal or non-verbal affects the feature of mutual understanding about outsourcing. This will create problems when we work with the people at remote locations (McCray, 2008). Job losses due to Outsourcing Most of the workers now believe they might lose a job for the reason that their organization is outsourcing that job to a foreign country. On the other hand, nobody actually knows the number of jobs that has been outsourced to other countries. According to various researches, more than 400,000 jobs earlier done in the United States are at the present performed out of the country through contractors. So, it is a really a worrying trend due to the outsourcing. Moreover, it is affecting the economy situation of the countries as well as people (Griswold & Buss, 2004; Agencies, 2004). Conclusion Outsourcing is not a new term for the businesses since a lot of organizations at the present use some kind of outsourcing in order to run their business effectively. Additionally, outsourcing brings a lot of benefits and opportunities for the organizations on the other hand there are also numerous worrying trends associated with outsourcing. This paper has presented a detailed overview of some of the main worrying trends emerging for outsourcing. Organizations must consider them before making a choice of outsourcing. References Agencies. (2004, March 17). 61% Americans fear job-loss due to outsourcing. Retrieved April 12, 2011, from rediff.com : http://ia.rediff.com/money/2004/mar/17bpo1.htm Bell, S. L. (2006, October). Your Top 10 Outsourcing Problems—Solved . Retrieved April 12, 2011, from MPO-MAG.com: http://www.mpo-mag.com/articles/2006/10/your-top-10-outsourcing-problemssolved Chopra, R. (2010, July 09). Outsourcing problems. Retrieved April 11, 2011, from The Outsource Blog: http://www.theoutsourceblog.com/2010/07/outsourcing-problems/ Davies, R. W. (2010). Outsourcing Problems and Disadvantages Revisited. Retrieved April 12, 2011, from http://www.drrobertdavies.com/bpoandoutsourcingproblems.php Flecker, J. (2009). Outsourcing, Spatial Relocation and the Fragmentation of Employment. Competition and Change Volume 13, Issue 3, pp. 251-266. Griswold, D. T., & Buss, D. (2004, September 15). Outsourcing Job Losses in Perspective. Retrieved April 12, 2011, from Mackinac Center for Public Policy: http://www.mackinac.org/6822 McCray, S. (2008, April). The Top 10 Problems With Outsourcing Implementations (And How to Overcome Them). Retrieved April 11, 2011, from TPI: http://www.tpi.net/pdf/papers/Top_10_Problems-with_Outsourcing.pdf Mintz, S. M. (2004, August 06). The ethical problems of outsourcing. Retrieved April 10, 2011, from Union-Tribune Publishing Co. : http://www.signonsandiego.com/uniontrib/20040806/news_lz1e6mintz.html Thompson, T. (2011, April 04). What is Outsourcing? Retrieved April 09, 2011, from WiseGeek.com: http://www.wisegeek.com/what-is-outsourcing.htm Turban, E., Leidner, D., McLean, E., & Wetherbe, J. (2005). Information Technology for Management: Transforming Organizations in the Digital Economy . New York: Wiley. Yakhlef, A. (2009). Outsourcing as a mode of organizational learning. Strategic Outsourcing: An International Journal Volume 2, Issue 1, pp. 37-53. Read More