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Outsourcing Characteristics Essay

1459 words - 6 pages

Running head: Outsourcing Characteristics

Outsourcing Characteristics
CMGT 578
23 September 2013
Professor Scott Goodman

Outsourcing Characteristics

In this paper, the Outsourcing features will be talked about in great deal and the features will consist of what are the influential aspects in a company determining to outsource. One reason that most companies select to outsource is that they have a prospect to reduce needless expenditure. In addition, the risk engaged in outsourcing will also be reviewed, this risk is that company information is no longer confidential and the partners you selected to outsource currently to have access to all ...view middle of the document...

When outsourcing from the United States, we normally subcontract to countries like China, India other countries. With the choice to subcontract to these countries, they comprehend English, but not their native language, and it can sometimes become the difficulty that may affect the project to fail. If a project manager thinks that this will not have a major effect on the project, they will allocate the project to be subcontracted. Outsourcing is expected to decrease cost for the company, but the manager also has to think about the cost to contract out to different location. Determining the outsourcing requirements and creating the business liaison and signing the contracts must be included. 
Many risks are involved when outsourcing and risk are the reason of reducing expenditure. Many senior managers that decide to outsource, assume that employment arbitrage will defer savings comparable to person-to-person relationship without regard for unknown costs and differences in operating models.
Next, risk involved in outsourcing is Data Security or Protection. There is the risk of a security break or intellectual property protection is essentially increased when working in international business. Privacy concerns have completely to be addressed. A company should expect that the vendor would not disclose classified records with other companies. This is why trust and professionalism is imperative with outsourcing. Culture is also a risk when outsourcing, most U.S. companies contract out their call centers in a foreign country and this offer the U.S. customer with changing accents and pronunciations that sometimes is difficult to understand. Culture also consists of how the employees dress their social activities and religion, and even the way in which questions are answered. Another risk engages how much oversight or directive the Government has such as financial services and healthcare. The problem of clearness is becoming more important as requirements for instance, the US PATRIOT Act and the Sarbanes-Oxley Act set burdens of responsibility on all American companies. 
Some risk involved in outsourcing the IT functions are that in the first year of the agreement, IT companies undergo 20% deterioration in output. This is mainly because of time spent relocating both technical and business expertise to the vendor. Many offshore vendors have happened with a solution to this problem by deploying video conferencing and classroom settings to get the effectiveness of transfer expertise better. Most offshore vendors take remarkable actions in implementing security practices to protect data and intellectual property. This is a decisive risk when considering off shoring because the vendor has access to all private company data. One of the most essential factors when considering outsourcing the IT function is to ensure that the vendor is experienced to take care of your most needs. The vendor should be qualified in disaster recovery for all...

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