Outsourcing Popularity in Companies

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Outsourcing has become increasingly popular. One of the major concerns that firms have with outsourcing is the relationship between its core competencies and the task or activity being outsourced.

In the strategic focus group that deals with outsourcing, several concerns are raised regarding the negative effects of poor outsourcing decisions on a firm’s competitive advantage.

This means that the process of outsourcing should be done in an effective way in order to reap the benefits of outsourcing. In the first place, outsourcing refers to the act of identifying different parties and entrusting them with the functions of the company.

A separate firm is selected on grounds of its expertise and resource base. In this paper, three case studies on outsourcing will be considered and the rationale for outsourcing justified (Mintzberg, 2000).

Case Study One: The Reservation Call Centre for an Airline

Airlines have myriads of activities that include preparing passengers for their respective destinations. This involves flight bookings and linking with passengers from other parts of the world.

This is accomplished through a reservation call centre. A call centre for an airline requires skills and resources as listed below.

List of Skills for a Reservation Call Centre’s Workers

Employees at the call centre must have excellent communication skills. They should be eloquent in many international and local languages.

They should also have an excellent command of information technology and specifically the skills and software used in call centres. At the same time, the employees should be knowledgeable in the management of databases for travellers and should have strong numerical skills.

People working in the call centres should have up to date information on the passengers’ destination including the weather and the general political condition (Porter, 2004).

Evaluation of the Outsourcing Situation

Airlines operate in many destinations found in different countries across the world. Taking care of the needs of potential passengers involves having a call centre in each destination with personnel equipped with skills mentioned above.

At the same time, airlines have to conduct strict supervision and on-job training in the call centres and incur the cost of setting up the machines and paying workers their benefits.

This means that outsourcing the services will be efficient and cheaper. At the same time, passengers will be able to access quality information if a call centre is handled by a qualified personnel.

Advice to the Airline

The airline in question should go ahead and outsource its call centre services because the process will be cheaper and efficient for its operations.

However, before outsourcing, the company should ensure good communication between its employees and the outsourcing firm because the workers are likely to thwart the process of outsourcing as it denies them job opportunities.

At the same time, the airline should ensure that customers are not exploited by the outsourced firm (Porter, 2004).

Case study two: A Software Firm’s Helpline

The software firm deals with the manufacture and sale of software programmes for various applications. The organisation needs a help desk for getting in touch with its customers and suppliers.

The customers of the firm could be local or international companies. The helpline should deal with complains involving installation and general trouble-shooting problems. The helpline can therefore be managed by few workers (Mintzberg, 2000).

List of skills for a Software Firm’s Helpline Employees

The employees in this case should have good communication skills. They should be knowledgeable in the programming language used in developing the software. At the same time, the employees should be knowledgeable about general trouble-shooting and installation procedures.

This means that the staff at the helpline should be a part of the technical team of the firm. On top of this, the staff at the firm’s help desk should be knowledgeable in taking orders based on the specifications provided by the customer.

Evaluation of the Situation

A helpline is an essential item in the running of the company. Through the helpline, the customers of an organisation are linked to the company and also helped in the process.

Through the helpline, customers are informed of the progress of their orders and assisted in troubleshooting. The skills required for the management of the helpline as seen from the first case are sourced from the workforce of the company.

Advice to the Software Company

The helpline for the software company is manageable and should not be outsourced. Outsourcing will be expensive because the helpline is not supposed to be offshore.

At the same time, software architecture demands maintenance of contacts with the customers to provide information on the customisation procedures and necessary functions of the software.

At the same time, outsourcing may lead to the loss of customers as a result of poor customer care because the company involved may not be aware of the technical procedures used in the design of the software. This means that there should be no outsourcing (Hanson, Hitt, Ireland & Hoskisson, 2011).

Case Study Three: A Credit Card Company Selling Additional Services to Cardholders

A credit card company provides additional card services to cardholders to enhance the effectiveness of the cards. Such services include recharge of the cards, renewal of the cards and general advice on the use of the cards.

To outsource such services, the client should have the qualities and duties below:

List of Skills and Qualities for the Credit Card Company’s Employees

The process requires clients endowed with good knowledge of cloud computing and financial services. These emplyoees should be geographically spread to reach customers physically.

They should also have the financial resource base for implementing recharge services.

Analysis of the Situation

Cardholders are geographically spread and numerous. Reaching them will be very expensive and ineffective. The company cannot maintain a base for the same and must therefore outsource the services.

Advice to the Credit Card Company Selling Additional Services to Cardholders

The company should outsource the card services but ensure that its operations are in the same cloud (cloud computing) of card operations in order to ensure quality.

Rationale behind Outsourcing

Outsourcing is mainly done for several reasons. They include: lowering costs of production, increasing the customer base, and improving the efficiency of operations. Before outsourcing, the company concerned should carefully evaluate the decision.

It should weigh if the cost and customer-touch, together with customer efficiency will improve the operations of the company or not. The decision to outsource should be based on the evaluation of these factors.

References

Hanson, D., Hitt, M., Ireland, R. & Hoskisson, D. (2011). Strategic management: Competitiveness and globalisation. 4 ed. London: Asia Pacific press.

Mintzberg, H. (2000). The rise and fall of strategic planning. London: Pearson Education press.

Porter, M. (2004). Competitive advantage: Creating and sustaining superior performance. New York: Free Press.

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