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Software And Also Host And Carry Out Consulting Samples For Students

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Question:

Do you know any organisation which outsources?
 
Think about some challenges which that organisation has?
 
 

Answer:

Introduction

Outsourcing has become a global phenomenon in recent years with the increasing need for more and more output. For example, IBM is an outsourcing firm that produces and sells computer parts like hardware, software and also host and carry out consulting firm services extending from supercomputers to microcomputers. While it was primarily a technology company, it has evolved drastically in the past few years by shifting its business to higher value and profit oriented market from product market. It has split its printer producing business in 1991 and disposing of its personal computer to Lenovo and bringing in consultancy services companies like PWC Consulting, SPSS, and The Weather Company. The company has decided to design semiconductors but outsourcing the production to other companies. This is an example of how outsourcing works. Numerous organizations these days perform such outsourcing activities which has resulted in the interconnection and interdependence between organizations.

 

Outsourcing activities

Many companies outsource its products and services for cost-effective operational activities. Outsourcing has been required in recent years because of its needs and wants for the organization and also to sustain in the market. The companies follow its outsourcing process by first making decision i.e. what to outsource and how to outsource and why to outsource. Outsourcing includes various parts of the business like time spent on accomplishing a job, the art and skills which are needed to do the job and the things needed to do the job (100-110, Axelrod, 2004). The company functions its outsourcing business by the following ways: innovation in work- company’s founders include company culture, foresight, and target to accomplish the task but it requires more than that the power of creativity. The job to develop a brand is given to the freelancer who develops the brand logos and fonts to progress the business. The outsourced companies develop the software and design which helps in marketing the product and services and they are also cost effective because of cheap labor (220-222, Haugen, Musser and Lovelace, 2009). The company has also outsourced its products because of high volume of stock where it does not have the space to hold the product and with its good database of contracts the company has outsourced it as it will have a check on overhead and also the risk will be at a minimum level thus ensuring a good logistic system. The company has a good specialization skills and it has also honed its skills. The company has different employees to do different work and each member is specialized in its skills but the company needed more skilled employees so it has outsourced its work in different part of the world because resources present over there which the company might not having physically (0:1-0:6, IBM Blue Gene team, 2013). So in these ways the company functions its outsourcing business. The company follows a fabless process in which it designs its products and sells the products of its own but the assembly of devices is done by other company. The company gives contract to that company which fabricates the devices at lower cost because in that country the labor cost is cheaper. One of the major outsourcing activities is IT (Information Technology) services and the field of BPO i.e. call centre to provide customer service. Companies such as IBM have followed outsourcing process as it has come across and faced various problems because of cut-throat competition so they have decided to lower their sales and operating cost by evolving their marketing plans. It also established call centre service to provide customer service by resolving their issues related to the product and services and taking customer feedback to improve the quality of services and products and also getting help in cost efficiency of sales and production. The companies outsourced its call centre department because it doesn’t know how to design and manage a call centre. Outsourcing enables the organization to do the work they know and outsourced the work that they don’t know. Companies mainly outsource the designing, hiring process and managing the telecom services center. The companies outsource its IT services to India as India has got good skilled engineer who can perform the task at much lower rate and also with perfection. The companies have its cloud software businesses, infrastructure service, and platform services (141-143, Coldwell and Herbst, 2004). This software’s enables the developer to make the work easy and to develop their product and services. The companies also offer data encryption services which provide security to the customer data. The companies also design hardware which include microprocessor which is used in making gaming products like play station, Xbox 360 The companies outsourced its fabrication to other companies but sells of its own (130-134, Quinlan, 2015). It has developed software for students like alpha Works where students can learn new skills to pace up with the technology and to upgrade themselves. It also develops Kenexa which provide employing the employees and holding them back. The companies also provides consulting services after buying PWC (127-138, Mutwil, 2016). It provides infrastructure, technology and financing services. The companies focused on customer relationship management, supply chain management and financing transacting management.  These all features provide good quality to the customers and satisfaction to the customers as The companies maintains the database of its clients with security and records and manage the database in accordance with the client’s needs (168-170, Collis and Hussey, 2014). The consulting services are also outsourced to The companies in different parts as it generates employment to the people of that country thus helping in increasing the standard of the living. So outsourcing has played a vital role in shaping the business of the world.

 

Challenges for outsourcing companies

An outsourcing company faces a lot of challenges from its rival companies. The companies have evolved in recent years drastically but it faces a lot of competition from the rival companies as they also produce homogeneous goods and services which led to cut-throat competition in today’s world (253-256, Jankowicz, 2005). The companies must focus on innovation and technologies on daily basis to sustain in the market. It has a very big market chain and operates in more than 170 countries and with expanding in business there comes big challenges in the path of business and to be a successful organization a company should overcome the difficulties, issues concerning the organization, problems to sustain in the business world (138-139, Bryman and Bell, 2015). The companies carry out a very large workforce in the field of IT, electronic gadgets, BPO i.e. call center and consulting services and to manage such a big organization The companies are facing a lot of competition from every sector of the organization. The products and services that these companies provide are making of software for different work to get accomplish, to maintain the database of its clients, to provide customer service to its customers, to manage the financial activity of its clients i.e. property, wealth, shares, and stocks (20-23, Bushell and Remington, 2007). The companies face severe challenges in various sectors and the revenue is declining day by day and the sectors are showing no improvement in performance and the investors have become annoyed with the companies’ bad performance. The following sectors are facing challenges and they are as follows:

  1. Hardware sector- In hardware system, The companies are facing issues in differentiating its hardware products from its competitive organization. The companies fail to ensure its customers that its product features, characteristics, performance, built quality are different in nature from its rival products and also it has not brought many innovative ideas to shape the hardware products (150-152, Blackstone, Prest and Lemmings, 2016). The companies have lost a majority of its revenue in its hardware business as its design, develops and sells computer products like mouse, monitor, CPU, floppy disk, hard disk etc. the share of its profit has fallen drastically.
  2. Software sector: Due to the effect in hardware sector the companies are affected in its software sector also as both hardware and software are interrelated products which help to built computers. The software is intangible in nature whereas hardware is tangible in nature (4-14, Vitasek and Manrodt, 2012). The sale of a software product depends on the sale of hardware products as both are complementary to each other (1583-1587, Multiple Objectives and Outsourcing Contracts in IT Outsourcing, 2015). So if the customers buys less hardware of a particular company, then they will also buy less software of that company thus making it decline in its revenue and also the third party is not buying the product because it can develop its own product, the reason is those rival companies are selling the hardware and software at much lesser price than the company and also providing quality product and services to the consumers. Thus the company would lose its customers worldwide.
  3. Service sector- The companies provide service in computer and consulting areas. Previously, the companies enjoyed a free run in the market when the technology was not high and there were few firms not as competitive as the few companies but in recent years the rival companies in computers and consulting services has evolved and giving tough competition to each other by providing better services to the customers and also providing cheap services and products (185-197, Busi and McIvor, 2008).
  4. CLOUD calculating: previously the companies have enjoyed a good run in its cloud services but in recent years it has faced tough competition. For example, as IBM faces competition from Google, Amazon, and Microsoft has they built better services of cloud storage than IBM.
  5. failing in controlling large markets: The companies are very large in terms of its turnover so it is quite difficult to manage such a large organization to make it top from its rivals as it includes a lot of strategies to overcome the difficulties.
 

Recommendations

The ways that an outsourcing company could overcome its drawbacks are as follows:

  1. It should make its product look different from others and also ensure its customers that the product function, built, features, qualities, and characteristics are unique in nature.
  2. It should improve its customer relationship management by providing new services and productive services to them and also resolving their problem and understand their needs.
  3. It should improve Supply chain management by having good contacts who could deliver the products quickly to the customers.
  4. It should improve its Cloud storage more than its rivals and provide new features in it.
  5. It should create new needs in the market and be the monopoly of those products.
  6. It should improve its hardware, software products by bringing innovation into it.
  7. It should sell premium products to increase its revenue.
  8. It should invent and develop new products in the market.
  9. It should make a better strategy to control its large market.
  10. It should provide better service in consultancy business from its rival firms.
 

References

Axelrod, C. (2004). Outsourcing information security. Boston: Artech House, pp.100-110.

Blackstone, W., Prest, W. and Lemmings, D. (2016). Commentaries on the laws of England. Oxford: Oxford University Press, pp.150-152.

Bryman, A. and Bell, E. (2015). Business research methods. Oxford: Oxford University Press, pp.138-139.

Bushell, S. and Remington, D. (2007). Applying intelligence to outsourcing options [intelligent IT outsourcing]. Information Professional, 4(2), pp.20-23.

Busi, M. and McIvor, R. (2008). Setting the outsourcing research agenda: the top?10 most urgent outsourcing areas. Strategic Outsourcing: An International Journal, 1(3), pp.185-197.

Coldwell, D. and Herbst, F. (2004). Business research. New York: Juta Academic, pp.141-143.

Collis, J. and Hussey, R. (2014). Business research. Basingstoke [u.a.]: Palgrave Macmillan, pp.168-170.

Haugen, D., Musser, S. and Lovelace, K. (2009). Outsourcing. Detroit: Greenhaven Press, pp.220-222.

IBM Blue Gene team (2013). The IBM Blue Gene project. IBM Journal of Research and Development, 57(1/2), pp.0:1-0:6.

Jankowicz, A. (2005). Business research projects. London: Thomson Learning, pp.253-256

Multiple Objectives and Outsourcing Contracts in IT Outsourcing. (2015). International Journal of Science and Research (IJSR), 4(11), pp.1583-1587.

Mutwil, A. (2016). Market Analysis of Business Process Outsourcing in Logistics. Marketing i Zarz?dzanie, 42, pp.127-138.

Quinlan, C. (2015). Business research methods. Andover: Cengage Learning EMEA, pp.130-134

Vitasek, K. and Manrodt, K. (2012). Vested outsourcing: a flexible framework for collaborative outsourcing. Strategic Outsourcing: An International Journal, 5(1), pp.4-14.

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