Shared Risk

Submitted by: Submitted by

Views: 282

Words: 297

Pages: 2

Category: Business and Industry

Date Submitted: 05/23/2011 06:33 PM

Report This Essay

Shared risks & availability of better technology

Companies that choose outsourcing become, in a short time, more dynamic

and eager for changes to be able to face new modifications enforced by

today’s economy. Investments risks made by a company in different fields

are enormous. Markets, competition, laws, financial terms and technology

are changing very fast. It is very difficult to be posted with the changes, especially

when these ones include big resource investments. When we resort

to outsourcing the risks are divided between several companies. A specialized

supplier does not invest on behalf of one single company, but on the

behalf of all clients. By sharing investments, the risks for one company are

decreasing.

Improvement of production and abstraction of delays

The increasing of production – more products or components are processed

outside the company in a shorter time and this way the company’s resources

are pointed to main activities. The contracts stipulate the delivery terms for

the products or components and this way any delay becomes company’s

responsibility. All parts of an outsourcing project can be closely followed.

Additional profits for employees

The productivity and efficiency of employees and management generally increases.

The employees will be included more often in the activities in which

they have the necessary skills and this way their self esteem will increase.

The major benefits can be registered not only in what relates to decreasing

of the costs, but regarding the receptivity of the company. The redefinition

of the job, a better usage of the employers and resources have the big

chance in making decisions concerning the offer of some inside activities to

the specialized companies.

Better stock management

The problem of stock is also outsourced, usually the components or products

arriving just-in-time.

Drawbacks for outsourcing

Many hazards