MANA 463 Lecture Notes - Lecture 13: Employee Assistance Program, Transaction Time, Strategic Planning
25 Jan 2017
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Document Summary
A contractual relationship for the provision of business services by an external provider. Occurs when outsourcing is done in a foreign country. Able to be fully or partly automated with technology. Able to be delivered by remote sites. Six major reasons: financial savings, strategic focus, access to advanced technology. Improved service levels: access to specialized expertise, organizational politics. Cost reduction is typically 10 to 20 percent. Economies of scale from specialized outsourcers who are more efficient. Decision to focus on specific core competencies, like customer service or innovation. Core work is transformational and adds value to employees or customers. Move secondary functions (or non-core work), like benefits administration, to firms that do these things well (they are core competencies for the outsourced firm) Technology has been a main driver of outsourcing. Technology enables a company to reduce transaction time (the time it takes to handle a request) Outsource to those who are excellent performers.
