Q1. What is Outsourcing? |
| A. Outsourcing can be defined as "the strategic use of outside resources to perform activities traditionally handled by internal staff and resources". |
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Q2. Why should organizations Outsource? |
A. The key reasons why an organization should Outsource are:
- Reduce and control operating costs
- Improve host company focus
- Gain access to world-class capabilities
- Free internal resources for other purposes
- A function is time-consuming to manage or is out of control
- Insufficient resources are available internally
- Share risks with a partner company
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Q3. What can an organization Outsource? |
A. The list of functions that can be outsourced is long. Among other activities the key functions that can be outsourced are the following:
- Transaction management
- e-CRM (electronic Customer Relationship Management)
- SCM (Supply Chain Management)
- Back Office Processing
- Payroll
- Billing
- Forms Processing
- Data Entry
- Accounting
- Web solutions
- Web development
- Web design
- Website security
- Website maintenance
- Web hosting e-commerce: B2B, B2C and C2B
- Telemarketing and Call Centers
- Tele-servicing and Product Support
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Q4. Who should an organization Outsource to? |
A. Selection of an outsourcing partner should be based on thorough research of the organization's capabilities and credentials. Key areas to be focused on while selecting a partner are:
- Domain Expertise
- Production and support processes
- Infrastructure
- People
- Training Capabilities
- Client Testimonials
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Q5. Why do certain outsourcing projects fail? |
A. Certain outsourcing assignments fail due to the following reasons:
- Lack of managerial support and active interest from the Top Management of the outsourcing organization
- Lack of clearly defined roles before the commencement of the outsourcing exercise
- Lack of a comprehensive transition plan
- Lack of clearly defined service level agreements
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Q6. What are the critical success factors of outsourcing? |
A. The following have found to be the critical factors for a successful outsourcing relationship
- Ensuring Top Management support of the outsourcing organization
- Communicating outsourcing objectives to all employees
- Assigning an outsourcing champion to manage the outsourcing exercise
- Keeping the lines of communication open between the vendor and the company
- Clear establishment of the levels of service expected from the vendor
- Clear definition of the roles that would be played by the vendor and the company
- Developing and adhering to a comprehensive transition plan
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