Introduction Of Outsourcing 5t2e1p

INTRODUCTION OF OUTSOURCING In business, outsourcing is the contracting out of a business process to another party. The term "outsourcing" became popular in the United States near the turn of the 21st century. Outsourcing sometimes involves transferring employees and assets from one firm to another, but not always.[1] Outsourcing is also used to describe the practice of handing over control of public services to for-profit corporations.[2] Outsourcing includes both foreign and domestic contracting,[3] and sometimes includes offshoring or relocating a business function to another country.[4] Financial savings from lower international labor rates is a big motivation for outsourcing/offshoring. The opposite of outsourcing is called insourcing, which entails bringing processes handled by third-party firms inhouse, and is sometimes accomplished via vertical integration. However, a business can provide a contract service to another business without necessarily insourcing that business process. Outsourcing is the process by which an organization contracts with another individual or company to get some of its work done. Viewed this way, most organizations go for some kind or other of outsourcing. Generally it is non-core aspects of the business that are outsourced. The firms that offer the services thus required are called service providers or third-party providers. Businesses may thus tie up with service providers for either individual processes or whole projects or operations. Outsourcing can be divided into two broad categories. They are BPO and KPO. Let us examine how each differs.

OUTSOURCING DEFINED Outsourcing is any task, operation, job or process that could be performed by employees within your company, but is instead contracted to a third party for a significant period of time. Hiring a temporary employee while your secretary is on maternity leave is not outsourcing. In addition, the functions that are performed by the third party can be performed on-site or off-site.

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The most common model of outsourcing that is in the news today refers to jobs that are being sent over seas to countries like India or China. This is more commonly called offshoring. Examples include telephone call centers, tech- and computer programming. More common examples that are not going overseas are janitorial services, after hours answering services and security services.

WHY OUTSOURCING? There are many reasons why a company may choose to outsource a particular function of their business. Most managers have the end-result-in-mind that they are going to save time and/or money. Other reasons include: Resource Shortages Relieved by Outsourcing A particularly strong reason to outsource involves a shortage of a critical resource. This can be available employees that possess knowledge in a certain area (e.g. engineers), availability of material (e.g. petroleum or minerals) and a labor force at a level and price that will offset the cost of higher prices alternatives. Outsourcing Provides the Ability to Concentrate On the Core Business Some necessary, but peripheral operations are outsourced most frequently. This gives the managers the ability to concentrate on the core business issues instead of getting distracted by required, yet minor matters. A good example is a major hospital in our area that outsources its security operations to a third party company specializing in security.

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Outsourcing Yields Cost Savings The prices of labor and/or materials keep increasing and competition keeps forcing prices lower. If there is an outsourcing solution that can save your company money and overcomes the disadvantages of outsourcing, these areas should be investigated. Outsourcing Provides Flexibility Seasonal or cyclical demands that ebb-and-flow put varying demands on the resources of the company. An outsourcing contract could provide the flexibility needed to stabilize these varying demands. Example: A business brings in extra ants during tax season and when being audited by the holding company that owns the business. Reduce Overhead Costs Through Outsourcing Some functions require a large outlay of money just to get started. This expenditure could be avoided by contracting with a third party. For example, expanding your call center’s capacity to the point where it exceeds the capabilities of your telephone system.Companies primarily outsource to avoid certain costs - such as peripheral or "non-core" business expenses, high taxes, high energy costs, excessive government regulation/mandates, production and/or labor costs. The incentive to outsource may be greater for U.S. companies due to unusually high corporate taxes and mandated benefits, like social security, Medicare, and safety protection (OSHA regulations). At the same time, it appears U.S. companies do not outsource to reduce executive or managerial costs. For instance, executive pay in the United States in 2007 was more than 400 times more than average workers—a gap 20 times bigger than it was in 1965. In 2011, twenty-six of the largest US corporations paid more to CEO's than they paid in federal taxes. Such statistics imply that the reason companies outsource is not to avoid costs in general but to avoid specific types of costs. Digital outsourcing One strong reason for outsourcing is the lack of available resources locally. This is particularly true for IT outsourcing, where the US has a lack of available resources. This knowledge gap can be felt more outside major cities. The digital workforce of countries like India and China are only paid a fraction of what would be minimum wage in the US. On average, software engineers are getting paid between 120,000 to 800,000 rupees ($4,000 to $23,000) in India as opposed to the $40,000-$100,000 in countries like US and Canada.[ However, unlike typical sweatshops and manufacturing plants, most of the digital workforce in developing countries have the flexibility to choose their working hours and which companies to work for. With many individuals working remotely from home, the

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companies that require this type of work do not need to allocate additional funds for setting up of office space, management salary, and employee benefits as these individuals are contracted workers. Another method of outsourcing is using a microwork service for repetitive tasks that would otherwise have to be performed by employees.

COMMON OUTSOURCED AREAS Although many areas and functions are outsourced, here are some of the frequently outsourced areas: 

Information Technology Functions

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Network and Telecommunications

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Human Resources and Insurance istration

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ing

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Marketing

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Security

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THE DIFFERENT SECTORS IN OUTSOURCING

As business realities change, an increasing number of companies are looking at ways to minimize costs. Outsourcing non-core areas to a skilled vendor like Outsource2india can be a viable alternative for them. Adopting this strategy can help the business reduce costs without compromising on quality. Today, businesses are outsourcing a diverse range of services. These range from the relatively low-skill call center services to MARKET research and analysis, which requires expertise and skilled workers. In addition, Finance and ing Outsourcing (FAO) is becoming increasingly wide spread as is medical outsourcing. From healthcare providers tosoftware developers, everyone seems eager to leverage the benefits of outsourcing. Outsource2india – different sectors outsourcing An outsourcing expert like Outsource2india offers a wide range of services to suit varied client requirements. These services can be classified into different outsourcing sectors. These include: 1. Call center outsourcing Typically, BPO services include:

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Inbound call center services – These typically include answering services that are available 24X7. Call center agents can also be trained to up-sell and cross sell services, take orders, and provide information on the benefits and features of products/services

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Outbound call center services – These include services like telemarketing services, lead generation services, and MARKET intelligence services

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Technical helpdesk services – This includes technical after-sales for products and services

2. Knowledge Process Outsourcing (KPO) A KPO typically provides domain-based processes and employs advanced analytical skills and business expertise, rather than just process expertise. Some research services include: 

MARKET research and analysis – These services help the business extract useful information that reveals current trends and provides inputs for decision-making

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Web-based MARKET research – These services help collect information from different websites. As compared to primary research where data is directly collected from respondents, data is collected from secondary sources like government publications and newsgroups

3. Data entry outsourcing All organizations, whether big or small, have data entry requirements. Data entry outsourcing can be divided into: 

Online data entry – These includes services such as compilation of data from websites and e-books, updating online catalogs, and creation of databases

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Offline data entry – These include services such as offline data capture, fillings of forms, forms processing, data entry from one format/version to another, MS Word document data entry, etc

4. IT sector outsourcing IT outsourcing typically includes outsourcing of software development. This may take the form of end-to-end outsourcing where all activities related to design, development, and testing are outsourced. In other cases, only a part or portion of the overall system is outsourced for development. This is in cases where the client does not have the requisite skills or technology for the development work. 6

5. Healthcare sector outsourcing Medical outsourcing includes a diverse range of HIPAA compliant services. These include: 

Medical transcription services – These include services to transcribe information from a variety of audio sources and file formats such as MP3, MPG, MOV, DSS, WMA, etc

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Medical coding and billing services – These services are delivered using popular billing software like Medic and Lytec

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Teleradiology services - These services provide 24X7 access to qualified radiologists

6. Financial sector outsourcing s outsourcing services include: 

ing services – These include preparation of FINANCIAL statements for the statutory annual audit, cash forecasting services, and payroll services

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Bookkeeping services – These include preparation and maintenance of both day-to-day books as well as monthly and quarterly s. It also includes preparations of different kinds of reports like sales reports

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Financial analysis services – These include analysis of FINANCIAL information such as FINANCIAL statements, portfolio structures, and offer documents

7. Engineering services outsourcing These include a range of mechanical, civil, structural, and architectural engineering services: 

Computer aided design (CAD) services to develop prototypes

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2D drafting services

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Conversion of paper drawings into a digitized format

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Design and analysis for residential and industrial buildings

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Architectural visualization services (3D rendering or 3D animations) 7

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Services for evaluation and strengthening of deteriorating structures

DIFFERENT TYPES OF OUTSOURCING BPO In BPO (Business Process Outsourcing), a particular process task is outsourced. An example would be payroll. BPO work could be either back office related or front office work. By front office functions we mean customer oriented work like MARKETING , answering calls, technical and so on, whereas internal work like billing and purchase come in the back office category. Multimedia/ animation, book keeping, business consultancy, CAD/ CAM, call center, DTP, data entry, proof reading and editing, typesetting, handwriting services, MARKETING , medical billing and transcription, web design and development etc are all services that could be put under the BPO category. BPOs a boon or a bane? Say BPO and the first thing that comes to mind is the high attrition faced by the industry. According to current data, the business process outsourcing (BPO) industry in India employs around 400 people every day with the people exiting from this sector being around 12% of the total workforce. The presumption is that attrition is being driven by the dead end, boring, repetitive work done in the graveyard shift. Recent studies, however, show that contrary to general perception, most people who quit tend to stay within the industry. And if they opt out, it is generally to pursue higher studies, while a very small percentage quit due to night shifts. This shows that majority of the people still remains in the industry and the high attrition rates facing the industry is largely a result of the huge supply and demand mismatch, more than anything else. the BPO sector is beginning to be addressed comprehensively as an industry and once it moves beyond metros, there will be a better demand-supply situation for talent. The BPO industry recorded export revenues of $ 6.3 billion during fiscal 2005-06 and is expected to touch $ 8-8.5 billion during 2006-07. It provides direct employment to close to half-a-million people and has been an industry that has been recording over 40% growth. The recent Nasscom-McKinsey Report 2005 on the Indian IT industry says the addressable offshoring market of BPO can go up to $120-150 billion from the current $11.5 billion. Even in its projections of $60 billion in IT export revenues, it expects the BPO segment to contribute $ 25 billion. Susir Kumar, CEO, Intelenet Global Services, says 8

that the success of the BPO industry has largely been a factor of quality manpower combined with sophisticated vendor base and improvement in the local infrastructure. The industry, which has been around 4-5-years-old, has also taken a faster road to maturity unlike its counterpart, the software industry, moving up both in of scale and value offerings. Voice-based and vanilla back-office activity has grown into sophisticated offerings like analytical services, legal advisory, high-value financial transaction services among others. Nasscom vice-president Sunil Mehta says there is a possibility of specialised BPO providers appearing like an operator of industry-standard transaction or platform based services like credit card processing. Nagarajan says that the rapid growth witnessed by the BPO sector will sustain with continued interest from the buyer community. Divakar Kaza, president, global HR, HTMT says, the industry has now reached a strategic inflexion point where the rules of engagement will change as the industry matures. Having established brand India in this sector, companies need to move up the value chain quickly, he adds. For the people-driven business, the biggest talent pool for the BPO industry has been the college graduates though this base has been widened. Chaudhry says that the industry has been able attract people with professional qualifications like chartered ants and MBAs and there has been a broad change in perception among colleges, students and parents about BPOs. The issue of expanding the scope of talent has also seen numerous companies reaching out directly to the colleges and engaging them early so as to make them industry ready. This includes introducing BPO curriculum in the educational institution as well as engaging the teaching community on the various opportunities available to the industry. KPO As is evident from the description, BPO activities involve carrying out standardized processes for the client. KPO or Knowledge Process Outsourcing typically calls for work that needs higher levels of involvement from the worker. The worker has to employ advanced levels of research, analytical and technical skills and has to make decisions of a higher order than BPO work. Examples are pharmaceutical research and development, patent/ intellectual property research, animation and simulation. Data research and analysis, legal services, content writing and development and database development services. KPO industry is less older and mature than the BPO sector. Apart from BPO and KPO, ITO or Information Technology Outsourcing is another major category. ITO is usually overseen by the CIO of an organization. However the CIO is often called in to manage BPO and KPO operations

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where no significant IT skills are involved. This is due to the expertise the CIOs would have developed in outsourcing negotiations.

FEATURES OF OUTSOURCING A practice used by different companies to reduce costs by transferring portions of work to outside suppliers rather than completing it internally. Companies that decide to outsource do so for a number of reasons, all of which are based on realizing gains in business profitability and efficiency. Principal merits of outsourcing include the following: Cost savings: Many businesses embrace outsourcing as a way to realize cost savings or better cost control over the outsourced function. Staffing levels: Another common reason for outsourcing is to achieve headcount reductions or minimize the fluctuations in staffing that may occur due to changes in demand for a product or service. Focus: Some companies outsource in order to eliminate distractions and force themselves to concentrate on their core competencies. Morale: This is an often-overlooked but still notable benefit that can sometimes be gained by initiating an outsourcing relationship. 10

Flexibility: Still others outsource to achieve greater financial flexibility, since the sale of assets that formerly ed an outsourced function can improve a company's cash flow. Knowledge: Some experts tout outsourcing of computer programming and other information technology functions as a way to gain access to new technology and outside expertise. ability: Outsourcing is predicated on the understanding-shared by business and vendor alike-that such arrangements require quality service in exchange for payment.

WHAT ARE THE DIFFERENT TYPES OF OUTSOURCING SERVICES There are four types of outsourcing services: professional, manufacturing, process-specific and operational. Each of these services have grown in popularity as more businesses look to reduce their overhead costs while maintaining the same level of output or . There are risks and benefits to outsourcing that must be considered when looking at different types of outsourcing services. The greatest benefit typically is cost reduction, because the company saves in both equipment and labor costs. The largest risks are related to quality and control. Professional outsourcing services include ing, legal, purchasing, information technology and other specialized services. This is the most common area for these types of services, because of the potential cost savings associated with this type of arrangement. The business has access to high quality resources while paying only for services actually provided. This substantially reduces the organization's overhead costs. Manufacturer outsourcing services usually are quite industry-specific. For example, an automobile manufacturer can have an outsourcing arrangement for the creation andinstallation of windows in all of their models. This arrangement will have huge implications on the operations but can result in significant cost savings and reduced assembly time. The primary risks with this type of arrangement are related to interruption of the production line and quality issues. 11

Other outsourcing services can be specific to a unique process or internal procedure. In many cases, it is more costeffective to have different parts or components manufactured by other companies. This simplifies the assembly process, reducing costs and the total amount of time required to create a complete unit. This type of outsourcing also is found in other industries. In the service industry, it is quite common to outsource specific aspects of the operation to other companies that specialize in that service. For example, a bakery can outsource the delivery of the final product to a couriercompany. This contract can provide details on delivery time lines, customer s and costs. This type of business arrangement allows each company to focus on its respective strength and improves customer service. Outsourcing services for operational activities are more common in the manufacturing sector than in other industries. The nature of manufacturing creates opportunities for very specific operational activities to be delegated to outside companies. Machine maintenance and equipment repair can be obtained from outsourcing services that specialize in the specific equipment. Other types of operational activities include cleaning, landscaping, facilities maintenance and property management.

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WHAT IS GLOBAL OUTSOURCING? Outsourcing is an allocation of specific business processes to a specialist external service provider. Most of the times an organization cannot handle all aspects of a business process internally. Additionally some processes are temporary and the organization does not intend to hire in-house professionals to perform the tasks. Once the task is outsourced to the service provider, he will take the responsibility of carrying out the tasks and maintaining the organization’s assets. However prior to outsourcing any component of your business to a third-party vendor, it is essential to understand the advantages and disadvantages of outsourcing. Although outsourcing presents a variety of benefits to your organization, it could also pose difficulties if not outsourced to the right service provider. The most commonly outsourced streams of business include: 

IT outsourcing

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Legal outsourcing

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ContentDevelopment

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Web Design and Maintenance

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Recruitment

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Logistics

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Manufacturing

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Technical/Customer Why do organizations outsource their business process? The key factors which have led to a growing trend of outsourcing are

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Lack of expert-labor in some portions of the business process

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Availability of cheaper labor, whilst not comprising on the quality of output

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Ability and feasibility to concentrate on the other crucial business process

ADVANTAGES AND DISADVANTAGES OF OUTSOURCING Outsourcing most commonly known as offshoring has pros and cons to it. Most of the time, the advantages of outsourcing overshadow the disadvantages of outsourcing. The Advantages of Outsourcing 

Swiftness and Expertise: Most of the times tasks are outsourced to vendors who specialize in their field. The outsourced vendors also have specific equipment and technical expertise, most of the times better than the ones at the outsourcing organization. Effectively the tasks can be completed faster and with better quality output

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Concentrating on core process rather than the ing ones: Outsourcing the ing processes gives the organization moretime to strengthen their core business process.

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Risk-sharing: one of the most crucial factors determining the outcome of a campaign is risk-analysis. Outsourcing certain components of your business process helps the organization to shift certain responsibilities to the outsourced vendor. Since the outsourced vendor is a specialist, they plan your risk-mitigating factors better.

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Reduced Operational and Recruitment costs: Outsourcing eludes the need to hire individuals in-house; hence recruitment and operational costs can be minimized to a great extent. This is one of the prime advantages of offshore outsourcing. The Disadvantages of Outsourcing

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Risk of exposing confidential data: When an organization outsources HR, Payroll and Recruitment services, it involves a risk if exposing confidential company information to a third-party.

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Synchronizing the deliverables: In case you do not choose a right partner for outsourcing, some of the common problem areas include stretched delivery time frames, sub-standard quality output and inappropriate categorization of responsibilities. At times it is easier to regulate these factors inside an organization rather than with an outsourced partner.

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Hidden costs: Although outsourcing most of the times is cost-effective at times the hidden costs involved in g a contract while g a contract across international boundaries may pose a serious threat.

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Lack of customer focus: An outsourced vendor may be catering to the expertise-needs of multiple organizations at a time. In such situations vendors may lack complete focus on your organization’s tasks. With all these pros and cons of outsourcing to be considered before actually approaching a service provider, it is always advisable to specifically determine the importance of the tasks which are to be outsourced. It is always beneficial for an organization to consider the advantages and disadvantages of offshoring before actually outsourcing it.

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TIPS FOR SELECTING A RIGHT VENDOR WHEN OUTSOURCING TO INDIA India has gained huge fame for its highly skilled human resource availability for servicing IT industry and meet outsourcing needs worldwide. By growing demand the Indian market has been flooded with small to mid size outsourcing companies offering offshore software development services. In this article I am going to share some tips which can help you to select a right offshore outsourcing company when you are planning for outsourcing to India. An ideal offshore outsourcing company should be well equipped in of Infrastructure and qualified human resource. It is important to examine the employees skill set, but it is more important to make sure that the software company you choose must be a process driven company but not human dependant. The accreditation like CMMi, ISO certificates, Microsoft competency certificates, etc. can acknowledge the company for following a well defined process which manage projects, maintain quality and deliver the work. While selecting an offshore software development company it is advisable to understand the Software Development Life Cycle adopted by that outsourcing company and how successfully it is been implemented in its previous work. You can also do a reference check with its present and past customers to get a or testimonials on company performance. An unavoidable step is to examine how well the company is maintaining Intellectual Property, proprietary software and new development specifications of its customers. It’s after sales and risk management policies should be reviewed based on your project requirements. The companies which can use its skilled resources follow well defined processes for software development and project management life cycles and maintain security for your project is the right offshore software development company to work with. These are some of the most important parameters which you can consider while examining a best suited service provider while outsourcing to India.

OUTSOURCING BOON OR BANE INTRODUCTION To put it in simple words outsourcing is basically shifting the of jobs from developed countries to underdeveloped countries. In the present world of cut throat competition, many companies in the so called first world nations like the USA and UK, outsource or shift some of their jobs to the so called third world or developing countries like India, China, Vietnam, Romania etc. Generally, the jobs outsourced are back office jobs or research and development jobs. 16

No one knows the possible future implications of this phenomena, but most positive thinkers believe that this is an evolution that had to take place and that this is a win-win situation for everybody. Outsourcing is not a recent phenomena, but has been going on since years. Developed countries have since long outsourced manufacturing jobs to countries like Africa, Latin America etc. But as these jobs involved manufacturing of solid substances there had to be transportation and sifting of the goods and this resulted in employment generation in a different way. But the outsourcing being done today is IT based and hence no transportation is involved except for shifting of data from one computer to another. And as no additional costs are involved, big companies wanted to cash in on it and others followed suit, and all this seemed to happen in a very short time. Also this resulted in no new employment generation as in case of manufacturing jobs. All these factors have led to a hue and cry against outsourcing in developed countries. When there was a shift in the economy from manufacturing jobs to IT related jobs, there were oppositions and protests over job losses, but over the years people seem to have adapted to this change. Experts claim that this will be the case for outsourcing also.

OUTSOURCING: BOON OR BANE FOR INDIA Over last few years, business process outsourcing industry has grown tremendously. Outsourcing actually came to India long time back in eighties when many foreign airlines opened their back office centres in India. Huge difference between Indian National Rupee and US Dollar and cheap labour availability, who were willing to work in shifts (to provide 24 hours to front office), prompted multinationals to come to India to increase their profit margin. Outsourcing flourished in India as it realised India’s needs also. Increasing population, poverty and unemployment have always been long lasting issues for the biggest democracy of the world. Limited government jobs and fistful of companies in India were not sufficient enough to create ample job opportunities. Outsourcing came as a big relief to India. Good number of jobs was created. Indian foreign reserve started increasing providing a boost to economy. People who could not continue their studies after 12th standard, were also able to earn decent money, which was a 17

mirage earlier. Once upon a time, educated people were wandering on streets, now even 12th standard out was able to sustain a decent life style. I could , when we were kids, we were often told to study hard by our parents and become IAS or other government servant. With each ing year, qualifying a government service, even upper divisional clerk or lower divisional clerk, became increasingly tougher. Probably population, with limited resources and slow economy growth were the reason behind that. In that scenario, outsourcing was nothing less than a boon for India. But then, anything good comes at a cost. I do not know if I am qualified enough to such comments, but my expressions are the outcome of what I have observed and studied on outsourcing and Indian economy. Many people have written on the cultural shock that Indian society has received with the advent of outsourcing. Youth is moving away from our culture and values.. blah blah. I won’t get into that, rather I would like to draw attention to the gradual intellectual incapability and complacency creeping into the youth of the nation. Based on my professional experience, I can say that only left over work comes to Indian software industry, which is labour intensive and does not require brain (with few exeptions as well), for example data entry, software testing etc. If I try to draw an analogy between software development works and constructing a multi-story building, the architecture, foundation and design part take place in US or Europe, the finishing or patching part comes to India. We paint a wall or do toilet/kitchen fittings, or if a wall was erected wrong and demolishing the wall and re-erecting would cost more there, then it would be sent to us. This is absolutely my understanding; please correct me if I am wrong. Such kind of work limits the learning curve as we do not get the exposure of high end work, which ends at the point where outsourcing starts. Over to that, today’s youth tastes money right after 12th standard while working in call centres. This is the time when youth es through the transition phase of life. Instant money, with malls and pubs around, are enough to drift him away from long term goals and ambitions in life. Many a time it has been seen, that student intentionally left school after 12th standard as they found good source of income in call centres. In future India can witness huge number of school dropouts which would in turn affect Indian economy in many ways. This outsourcing could be a big bubble in the making, which could shatter Indian economy in coming years, probably 10 years or 20 years or even after that.

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OUTSOURCING: BOON OR BANE IN INDUSTRIES

Outsourcing is nothing new. It has been practiced for decades. Industries such as retail, automotive, and others have used the specialized services of contract organizations to drive down costs and increase efficiencies. The pharmaceutical industry, however, has always closely guarded proprietary projects, compounds, and processes and has only recently, in the face of escalating costs and decreasing R&D productivity, warmed up to the idea of routine outsourcing. Outsourcing in the pharmaceutical market is certainly on the rise, as evident by the rising numbers of contract research organizations (CROs) and contract manufacturing organizations (CMOs), both in the United States and in countries such as India and China. The types of services offered have also intensified and diversified. Many equipment manufacturers and reagent providers are also now including contract services as a part of their portfolio of offerings. Cost-cutting definitely sparked this trend, but there is also increased pressure to do things fast and to do it right the first time around. The other factor contributing to this growing trend is the advancement in informatics technologies. The availability of better tools for monitoring quality control and maintaining client confidentiality by preventing data security breaches have been crucial in making companies feel connected and in control of the work being done at a contractor's site. This month's cover story by senior editor Patrick McGee profiles TAP Pharmaceutical Products Inc., which has taken outsourcing to new heights. TAP owns no laboratories, relies almost entirely on licenses and contract agreements, and functions almost like a virtual company. It outsources nearly all elements of the pharmaceutical pipeline including drug discovery, development, manufacturing, and clinical trials.

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How successful is this outsourcing model? It seems to have worked well for TAP, but I am not sure how likely other companies are to adopt a similar business model. TAP has been able to maintain a rigorous control on the design and implementation of its goals by its contractors. It also found this model useful when making go/no-go decisions because there is not much emotional attachment to any particular project. However, this business model is restricting because there are certain limitations with in-licensing and outsourcing in of procuring compounds, pursuing therapeutic areas, or using specific technologies and processes. A lack of emotional attachment can be both a boon and a curse. We hear of numerous examples in the industry where management would have killed a research project, that ultimately resulted in a blockbuster, had it not been for a champion who had emotional ties to the project or compound and actively fought for its survival. It will be interesting to see how the outsourcing trend evolves in the coming years.

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BALANCING OUTSOURCING: BOON OR BANE? Talking about outsourcing will right away bring up cheap labor in our minds. The fact is that outsourcing is more than it meets the eye; it is not all about having your job done cheaply. Outsourcing is about having your work done from aprofessional outsourcing company, a skilled professional team, or an individual expert outside your organizational structure, yet holding all the rights and responsibilities to the production and distribution of the product. This can be both – either advantageous or disadvantageous, at the end of it all that matters is the personal perspective. So when did it all begin? Well, giving an exact date is impossible but yes, it may have started when people saw the benefits of TRADING jobs during the ancient civilizations. People started to form groups of likeminded peers and divide tasks that were respective to the experts in the group. Inability to perform a job due to competent reasons forced the group to collaborate with other groups. This wild fire spread across societies, civilizations, and even countries. Seeing this everybody began to choose specializations and there were born the specialists. Traditionally, companies thought of doing all their work single-handedly in-house. But the work grew and thus the production costs as well. During the Industrial Revolution the industrialists sought to gain profits and their goals were well defined –profits only! To cut on the production costs organizations went to others to get their work done cheaply. And so, it all started. Talking about software outsourcing, it didn’t popularize until the 90s. 90s saw the Internet boom and so everybody dipped their hands in the flowing IT river that seemed the most beneficial at that time. Today it is highly impossible to find a task that is not being outsourced. Growing economies like India, China, Brazil, and Russia are the hot destinations to find outsourcing vendors as skilled labor is easily available and the economies help in checking the business processing bills. The overlooked feature that outsourcing provides is that companies can concentrate on their core business competencies and have their sidetrack jobs done inexpensively at the same time. Now let us talk about the reasons why any enterprise should outsource. As mentioned above, outsourcing gets your work done efficiently yet inexpensively.

Other reasons to outsource work are: 

Look for corporate growth

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Spend more time with the customers to improve MARKET share

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Bring in innovation 21

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Lack of technical advancements in the house

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Access to expert competency and talent

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Reduce the time to MARKET the product

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Reap from a pool with variety in knowledge and skills

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Tax benefits – this will stay respective to the country that work is being outsourced to

The list is endless, and as said before, it’s the perspective that matters the most. So is outsourcing a boon or a bane? Good question. For the short term the country whose companies are outsourcing may see it as a shortcoming. But in the long run, the economy will be booming again. Thus to conclude, even if the outsourcing industry may seem to be a disgrace to the MARKET , in the long term it is going to be the significant market share contributor. The seeds have been sown and the flowers are blooming, the fruits are not far to be reaped.

OUTSOURCING – A BOON OR BANE? INDIA IS STILL DECIDING The Outsourcing industry came to India almost way back in the 1980s with some European airlinesbringing their back office operations to India. In the last two decades the industry has seen an unprecedented rise and is providing employment to almost millions in the country yet there are some who are still deciding if its advent has been for the good or the bad. The rise of outsourcing in India is often associated with the death of its rich culture and values however it’s not fair to single out the industry.

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Over the years India has been changing and the outsourcing Industry has only been a part of this change. No outsourcing organization has an induction program aimed at training its employees on consumption of drugs, extra marital affairs, casual sex or the likes. The availability of high disposable income in the hands of the youth may for such activities. In India where poverty has been an issue for years and continues to be, the outsourcing industry came as a huge relief. It provided employment opportunities to even those who could not complete their education after their twelfth standard. It came as a ray of hope in the lives of retired personnel from the armed services, women with no vocational background or formal degrees and physically disabled people. Its advent gave business and increased avenues in the ing industries like catering, training and development,transport vendors and security agencies. The role of outsourcing in the progress of the Indian economy can be substantiated by the fact that the government is planning to initiate a separate ministry for it.

OFFSHORE OUTSOURCING OF CUSTOMER SERVICES – BOON OR BANE? ABSTRACT Purpose – Offshore outsourcing of customer services is growing rapidly but there is little known about its impact on customer perceptions and behavior. This paper aims to combine the learnings from the countryof-origin and service research to address this gap. Design/methodology/approach – An online survey was conducted by ing a sample of 5,000 customers randomly chosen out of a database of over 100,000 customers provided by a large American retail FINANCIAL services company, immediately after they had an interaction with an offshore service representative, resulting in 548 complete and usable questionnaires. Findings – Consumer ethnocentrism has a negative influence on the attitude towards offshore outsourcing and the perceived service quality and customer satisfaction with offshore call centers. Customer satisfaction also mediates the influence of perceived service quality on customer complaint behavior, brand image, brand loyalty, and repeat purchase intentions. Research limitations/implications – This paper focuses on the effects of consumer ethnocentrism and attitudes towards offshore outsourcing on several perceptual and behavioral variables in a B2C context with American customers and Indian customer service executives. Hence, its findings may not apply to the B2B context and other country settings. 23

Practical implications – The findings highlight the need for greateremployee training as well as customer education for firms using offshore customer service centers, to minimize customer complaints and protect their brand image, loyalty, and repeat purchase intentions. Originality/value – The study offers new insights on the impact of consumer ethnocentrism and attitude towards offshore outsourcing on customer perceptions and behavioral intentions, mediated by customer satisfaction and perceived service quality. Offshore outsourcing is the practice of hiring an external organization to perform some business functions in a country other than the one where the products or services are actually developed or manufactured. It can be contrasted with offshoring, in which the functions are performed in a foreign country by a foreign subsidiary. Opponents point out that the practice of sending work overseas by countries with higher wages reduces their own domestic employment and domestic investment. Many customer service jobs as well as jobs in the information technology sectors (data processing, computer programming, and technical ) in countries such as the United States and the United Kingdom - have been or are potentially affected.

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OUTSOURCING HR FUNCTION A BOON OR BANE After the advent of BPO (Business Process Outsourcing) and KPO (Knowledge Process Outsourcing), it is now the turn of HRO (Human Resource Outsourcing). The concept of HRO is growing at a faster pace as days are ing by. Human Resource is a very important department in an organization. It is rather an intense pillar of an organization. Companies are realizing the importance of hiring, training and retaining their employees, therefore tremendous importance is needed to be given to HR Portfolio. HR outsourcing is the outsourcing of peripheral but necessary istrative tasks such as payroll, benefits, After the advent of BPO (Business Process Outsourcing) and KPO (Knowledge Process Outsourcing), it is now the turn of HRO (Human Resource Outsourcing). The concept of HRO is growing at a faster pace as days are ing by. Human Resource is a very important department in an organization. It is rather an intense pillar of an organization. Companies are realizing the importance of hiring, training and retaining their employees, therefore tremendous importance is needed to be given to HR Portfolio. HR outsourcing is the outsourcing of peripheral but necessary istrative tasks such as payroll, benefits,Outsourcing HR function is a question of great importance. Today with the growing scenario of industries, we come accross lots of companys are going for outsourcing their HR Functions. There are various reasons for this, which may be the companies inability to meet the changing trends in HR or may due to the increasing cost or lack of adequate talent within the organization. Here is a presentation which our group of MPM students had prepared to dicuss whether outsourcing is a Boon or Bane. The conclusion defines that it depends and varies from organization to organization and also which function is being outsourced.

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Why Do Companies Outsource Their HR Functions? Human Resource Outsourcing (HROs) organizations exist to , extend, or replace the human resources (HR) functions for other companies. HROs core business is finding the ways to make their clients HR functions more efficient and delivering them to the client organizations. For that reason many of these organizations strive to stay on top of the best HR practices, emerging workforce technologies, as well as relevant laws, and regulations. This allows client companies to focus on what is core to their business and re-allocate internal resources for initiatives focused on increasing revenue and profitability. HRO provides a unique outside perspective and can result in a true strategic partnership that may be much harder to achieve within the client organization. The internal HR organization is expected to be a partner helping attract, groom, and the key asset of the company the people.

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CONCLUSION

The decision on whether or not an organization should outsource a part of their business is a complicated one, and should not be taken lightly. Searching for short-term cost savings is not a bad idea, but choosing outsourcing based solely on cost reduction or tactical problems is a short-term solution and will undermine a company's potential for long term success. The organization should have sufficient management skills and the ability to adapt new behaviors and processes to successfully manage an external part of their business. These skills should include knowledge management abilities and a willingness to apply them to a new and more challenging situation. Tacit knowledge must specifically be considered when planning an outsourcing strategy, particularly if the component of the business to be outsourced already exists internally and valuable institutional knowledge will be lost. The transfer of tacit knowledge can have a profound effect on quality and overall strategic business value. Cultural and language barriers add challenges to the already difficult process of transferring tacit knowledge and are of particular concern in cases of cross-border outsourcing. Finally, once a decision has been made to outsource aspects of a business, specific knowledge management strategies can be implemented that will maximize the benefits that are available from a decentralized business model.

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