Question

Instructions As a manager of an organization, you will often need to find ways to cut costs. One way to cut costs is to outsource by hiring another organization to perform the service. Consider the scenario below. As a manager for the public outreach department, you realize that the current system for managing outreach issues is outdated. You would like to have a new outreach system developed using the Cloudera platform to help manage big data. However, no one in the organization has the expertise. You will have to outsource the project to save on costs and avoid management problems. Two companies have sent in a bid—one from Vancouver, Canada, and one from Mumbai, India. The bid from India was slightly lower than the bid from Canada. Compose a response that includes the elements listed below. Define what is meant by outsourcing. Explain how Peter Drucker’s statement (covered in the textbook in uCertify) about how one company’s back room is another company’s front room pertains to outsourcing. Use an example. Summarize the management advantages, cost reduction, and risk reduction of outsourcing. Summarize the outsourcing risks concerning control, long-term costs, and exit strategy. Discuss which company you would outsource to and why. Does distance matter? Your case study must be at least two pages in length (not counting the title and reference pages), and you must use at least two references as a source for your essay. See the Suggested Reading section for some sample articles on outsourcing. Be sure to cite all sources used in APA format, and format your essay in APA style.

Answer 1

Please use the following points as reference and elaborate these to answer the essay question: Outsourcing: In simple, it is a business practise in which the organizations outsource i.e. allocate work for some other external company by making them responsible to manage the internal requirements. It is usually an effective way towards cost controlling and on the other hand, it brings in new innovative and creative initiatives to upgrade and grow as per the emerging market trends The statement of Peter Drucker A company should be engaged in only the front room activities that are critical to supporting its core business. Back room activities should be handed over to other companies, for whom these tasks are the front room activities' is truly related to 'outsourcing as discussed below: The front office room activities meaning the core functions of an organizations and also, those which contribute for achieving the objectives of the company hence, these are highly important to concentrate and self-mange for the prospective growth On the other hand, since, one company's back room activities will be core for some other organization as their core work is only provide support functions to the organizations . Importance and uses of the outsourcing need to be discussed here For example, A Multi-national company requires security services but, it is not their core activity or in other words, their front room activity hence they outsource it to a security agency, for whom the core activity is to provide security services Outsourcing risks: Control - The level of liability of the service providers will be as per the contract between the parties Long-term costs – The identification of work and its requirement will be helpful in best managing these costs Exit strategy – The organization will outsource the work or seek for services only when required hence, exit strategy is so simple rather the actual internal functions It is wise to go ahead with the company offering the lowest bid since, the core objective of outsourcing is to save money or cost cutting. Hence, it is appropriate to go with bid from India. In addition to the above-mentioned reasons, student can discuss other reasons as well (in brief)