Professional Development and Research - Dissertation Example

Outsourcing, cost-cutting and labour Hemis Number Word Count Outsourcing- cost-cutting and labourOutsourcing is the act whereby a firm deals with another firm to tender services that could otherwise be presented by domestic workers. Outsourcing may also involve relocation of workers to the outsourcing firm (Gefen 2011). It helps a company to succeed since there is no shortage of skills and expertise. Outsourcing is done to lower cost and also to improve quality. Outsourcing started in data-processing firms and its now spreading to other areas. It makes use of resources and the international labour more efficient (Gefen 2011). Outsourcing can lead to a number of gains to the industry but there are some human expenses to be accounted for which should also be considered as major factors when outsourcing. Research Questions 1. What is the need of outsourcing? 2. What are the benefits of outsourcing? 3. What are the advantages and disadvantages of outsourcing? 4. What are the risks of outsourcing? 5. What are the effects of outsourcing to the country? Purpose The purpose of this research is to determine whether outsourcing has any effects on cost and labour in an organisation. Outsourcing has many effects to both the organisation and the consumer. The effects can be both negative and positive. This mainly depends on the considerations made by the organisation before it embarks in outsourcing. Enough inquiries should be made before a company decides to outsource to another firm. This research will help industries decide on when it is necessary to outsource, the benefits and the limitations. Though there might be short-term price benefits, there are lasting costs connected with reduced edification of workers, less devotion of the employer and reduced employer devotion. This research seeks to understand the effects of outsourcing on cost cutting and labour. Outsourcing depends on the different business situations that different industries have. Before any organisation sets-off for outsourcing, assessment and careful planning are considered a necessity for any industry. Literature Review Benefits from outsourcing are really felt in the economy in the US although there were anti-outsourcing criticisms from some industries. It is very hard for anything or anybody to paralyze the economy or the workers because of the American achievement which lies in its modernization and opportunity (Gefen 2011). Effectiveness, immense communication, sincerity and reliability are some of the key issues to consider when looking for a relevant service provider. China Service Outsourcing Research Centre (henceforth referred as CSORC) was founded in the year 2007 in Beijing, China. CSORC was founded so that it would help in driving development in China’s outsourcing organisations and help promote researches and promotion of high-level abilities. There are traders who invest in excellent schemes and technologies. By outsourcing to such vendors, an organisation accesses proficiency and amenities without having to pay for them (Jacques 2006). The organisation also benefits from the training. Since its establishment, CSORC through the supervision of the Ministry of Commerce has made accomplishments because of the combined hard work of all researchers. It has developed and designed the assessment system of China, which relates to evaluation of home service. The aim of this system is to ensure that there is optimized resource distribution in the cities. CSORC prepares and distributes the service training materials to the relevant training institutions (Mclvor 2010). Information Systems (hereafter referred as IS) outsourcing is where by all or a fraction of a company’s IS are turned over to exterior service suppliers (Axelrod 2004). This is made to improve industrial, calculated and reasonable benefits. Until the year 1990, a force for outsourcing was a gainful bridge to focused computing knowledge and structure advancement expertise. Back then, computers required significant space and controlled location in order to function effectively. In order to condense all this many industries have contracted with information processing agencies for dealing out the information. The IS used by a company greatly influences its future. On the issues of research, outsourcing research can be classified into areas of performance, decision, relationship and organisation (Axelrod 2004). In case an industry outsources work, the resources connected with the relocated work (e.g. vehicles, equipments and licences) are sold to the vendor. This brings money to the industry depending on the value of the possessions sold (McIvor 2010). An organisation focuses on the possessions on its major aspects of the business. This adds better worth to the business actions that are largely important. This builds better customer relations thus restoring the market industry for better sales. The costs of operation are lowered because when a firm carries out its activities internally, from research to production high expenses are incurred. The outsourcing trader does the work at a lesser cost thus irregular cost not passed to the client. Reasonable advantage is facilitated and this reduces the buyer’s cost. Investing is a risky business for any industry. When an industry is required to centre on its possessions, quick adjustments in the market can manipulate financial situations, competition and technology and influence the industry. Thus, outsourcing with a firm that has already invested lessens the troubles to the individual industry. In regard to CSORC, lack of a better plan to choose the outsourcing partner can lead to collapse of business (McIvor 2010). When an organisation outsources information and enrolment services, it engages in a big risk of an organisation’s confidential information being leaked out to an arbitrator. The time line for the delivery of services may also be interfered with if a good outsourcing firm is not considered. Goods produced may be of low quality. There are also hidden costs when an organisation is signing a contract across worldwide borders. When there is variable changes in financial values, cost-effectiveness may sometimes go down. In the case where an outsourced vendor deals with products of different industries, the vendor may lose the customer focus and thus produce low quality goods. Effects of outsourcing to a country Outsourcing contributes to loss of income by state, local and federal governments. There are less taxpayer’s receipts and less contribution to national schemes and medication. In the 19th century, Britain imported cotton from the US, developed the cotton into fabrics and then exported the finished goods to other countries. Out of this, 80% of the profits remained in the UK and this improved its stature. Afterwards the mill owners believed they could grow cotton in India, which was UK’s colony and so moved the textile machines to India to save costs on shipping and wages (Gefen 2011). It was a great idea but now the financial gains for the UK reduced to 20% while the other 80% stayed in India resulting in community strife and joblessness in the UK (Jacques 2006). The US also suffered related problems by outsourcing. Outsourcing reduces financial gains and trained labour is lost. Manufacturing jobs have the utmost force on nationwide economy in account of losing talents and they pay more than the service jobs. Many governments nowadays outsource part of their skilled labour because it gives them many profits (Greaver 1999). Outsourcing therefore can bring wage gains to a country due to the outsourcing of the skilled labour. US have of late outsourced its industries to China. That has greatly improved the economic status of China. Consequently, this has led to the US losing most of its profits to China and the issue of low quality goods produced from China have arisen (Greaver 1999). Methodology The research was developed in five industries across America and Europe. Specifically, the researcher targeted industries that had outsourced either internationally or locally. The study was an empirical study developed with study questionnaires. Study questionnaires were developed and used to obtain data from the industries. Specifically, industries were asked to identify the processes they used and their considerations before they sign the contract forms to outsource the industries, the technologies applied in risk management and prevention and whether there were suggestions to improve the risk management when outsourcing. They were asked to sign consent forms, in which clear information on the need to uphold their identities as well as the use of the study results were provided. Data collection Data collection procedure was done with study questions. The questionnaires and consent forms were delivered to the identified respondents in these industries. A period of two weeks had been set for the data collection process. The duly filled-in questionnaires were obtained at the end of the two weeks period, checked for errors and ambiguity and used to derive information. Data analysis Useful data was obtained in the questionnaires received and checked for errors. Data analysis tools were utilised. These include computer-based techniques like Microsoft databases and spreadsheets. The analysis techniques utilised were correlations, regressions and comparisons for the different data obtained. Tables, charts, correlation tables and graphs as well as statements were used to present the data. Conclusion Empirical results on the relationship between outsourcing to cut costs and labour show that there are mixed results and impacts on different industries. The expected performance result of outsourcing was tested and the outcome illustrated efforts by industries to slash costs by mechanizing the business tasks in existence. The results showed unenthusiastic irregular returns. The analysis has shown incompatible outcomes on how tactically stimulated outsourcing influences an industries presentation. References Axelrod, CW, (2004), Outsourcing Information Security, NY, Artech House Gefen, D, (2011), The Art of Successful Information Systems Outsourcing, NY, Momentum Press Greaver, M.F, (1999), Strategic Outsourcing: A Structured Approach to Outsourcing Decisions and Initiatives, NY, AMACOM Div American Mgmt Assn Jacques, V, (2006), International outsourcing strategy and competitiveness, London, Editions Publibook McIvor, R, (2010), Global Services Outsourcing, London, Cambridge University Press Read More