Outsourcing is simply an extension of the long-standing practice of:
Answer Explanation for Question: Outsourcing is simply an extension of the long-standing practice of:
Subcontracting and Operations Management
The practice of subcontracting involves bringing in an outside company or individual to complete specific parts of a project. Most of the time, a company subcontracts another business to complete a task that is not able to be handled internally.Operating mechanisms are designed by organizations to ensure that they gain optimal output from their input sources. This process of optimizing business practices to create the highest level of efficiency is called operations management. To maximize efficiency, resources, materials, equipment, and technology are utilized. In general, operations management involves converting materials and labour into products and services in the most efficient manner in order to maximize profits for the organization. In addition, the operations management team handles strategic matters such as determining the size of a manufacturing plant, project management methods, inventory levels, quality control, and maintenance policies, among others. The operations management team overlooks outsourcing as a critical strategic issue.
The term outsourcing refers to the practice of hiring a third-party organization to perform services that were originally performed in-house. The shift towards a customer-focused business model resulted in outsourcing becoming an integral part of business economics in the 1990s. Over the past few decades, organizations have realized that in order to remain relevant, they need to keep increasing the value their customers generate from their services and products. This prompted more and more businesses to turn to outsourcing.
Benefits of Outsourcing
- Outsourcing helps the organization to reduce cost.
- Outsourcing processes in external organizations usually employ specialized technologies that allow them to complete a task faster and at a lower price.
- In similar way, outsourcing costs only arise when a particular process is ongoing; when these processes are not required, no bills are generated.
- The outsourcing partner’s expertise, which enables them to quickly and efficiently get started on an organization’s processes, is another essential advantage of outsourcing. Outsourcing partners are experts in their field, so they can quickly and efficiently handle an organization’s operations.
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