Outsourcing



=Introduction=

Outsourcing (or contracting out) is a process that takes place when an organization transfers the ownership of a business process to a supplier. In most business relationships the buyer still remains in control, telling the supplier how they want the job done and what they should do. But in outsourcing, the buyer doesn’t instruct, instead just communicates the ideas and the results that he is interested in buying, and leaves the development of work up to the supplier, allowing them to do what they want.

A benefit of outsourcing is that it allows company to focus on processes they are good at, while moving their weaker processes to another business. For example, a company who is strong in marketing, but not production, may decide to outsource production to a company that's specializes in manufacturing. By outsourcing, they can direct their energy to what they are good at (in this case marketing).

Outsourcing is often described as the delegation of non-core operations or jobs from internal production within a business to an external entity that specializes in that operation. Outsourcing is a business decision that is often made to lower costs or focus on core competences.

=Advantages of Outsourcing=


 * Companies can save up on the operational costs
 * Get access to cheaper and more efficient labour
 * Reduce cost on labour training
 * Access to better technologies at a cheaper cost
 * Increase productivity
 * Concentrate on core expertise

=Disadvantages of Outsourcing=


 * Company might get into trouble if the service provider go bankrupt
 * The company might loose the control over its process, since they outsourced and transfer the control to the service provider
 * Performance of the worker will be decrease due to the threat of outsourcing
 * The service provider especially in developing countries might have negative attitude toward the company

=National Outsourcing Association=

The NOA is a Not-For-Profit trade association, which promotes best outsourcing practice and represents the interests of outsourcing users, suppliers and third party support companies. Its main aim is to provide advice on best practice and an environment where organisations can ask for and give advice.

The NOA has established worldwide industry links - it is the voice, forum and champion for the business outsourcing community
 * The NOA operates as a trade association; an independent 'not-for-profit' body whose objective is to leverage effective outsourcing by: promoting best practice, service and innovation in the application and development of outsourcing
 * Lobbying national governments, sector regulators & and the EU on matters affecting the collective interests of its members
 * Delivering information on market developments in business outsourcing to its members (benchmarking, standard contracts, market research, tariff and pricing reviews etc.)
 * Communicating the benefits and lessons learnt of business outsourcing encompassing business processes and supporting infrastructure (on-shore & offshore)

Source: http://www.noa.co.uk/whatwedo.html http://www.x-istech.com/html/outsource.aspx