ONLINE ASSIGNMENT ON ‘OUTSOURCING’

Anwar S H

English

Ktct College Of Teacher

Education

kaduvayil, Kallambalam, tvm

anwarsh786@gmail.com

By

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K.T.C.T COLLEGE OF TEACHER EDUCATION

THOTTAKKADU P.O, KALLAMBALAM, THIRUVANANTHAPURAM

B. Ed Course 2014-2015

SEMESTER 2

ONLINE ASSIGNMENT

EDU 10.2: Techno- Pedagogic Content Knowledge Analysis- English

Name of Trainee...Anwar S H.....................................................................

Reg.No.....16514369002...................Year......2014-2015.............................

Subject....English.........................................................................................

Certified bonafide record of......Anwar S H...................................................

Register No........16514369002...........for the year 2014-2015.

Examiner Principal Lecturer

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OUTSOURCING

Online Assignment Submitted

To

Mrs. Manjusha S

Lecturer in English

For Course No. EDU 10. 2

Techno- Pedagogic Content Knowledge Analysis- English

During the Second Semester

of the B. Ed Course 2014-2015

By

Anwar S H

English

K.T.C.T College of Teacher Education

Thottakkadu p o, Kallambalam, tvm

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INTRODUCTION

Outsourcing is any task, operation, job or process that could be performed by employees

within your company, but is instead contracted to a other party for a significant period of time.

Hiring a temporary employee while your secretary is on maternity leave is not outsourcing. In

addition, the functions that are performed by the other party can be performed on-site or off-site.

The most common model of outsourcing that is in the news today refers to jobs that are being sent

overseas to countries like India or China. This is more commonly called off shoring. Examples

include telephone call centres, tech-support and computer programming. It has been around as

long as work specialization has existed.

Outsourcing is an effective cost-saving strategy when used properly. It is sometimes more

affordable to purchase a good from companies with comparative advantages than it is to produce

the good internally. There a various kind of outsourcing in business field and Educational field.

The outsourcing related to business can be termed as Business process outsourcing (BPO) and the

outsourcing related to Education can be termed as Knowledge Process Outsourcing (KPO). Both

are widely using in the national and international current scenario.

It is also the practice of handing over control of public services to for-profit corporations.

Outsourcing can also be viewed as any assistance from an intermediary that is more capable of or

familiar with certain practices than us. It is just a way of seeking for assistance. It includes both

foreign and domestic contracting and

sometimes includes offshoring (relocating a business function to another country). Financial

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savings from lower international labour rates can provide a major motivation for outsourcing or

offshoring.

This is an assignment which detailely describes about the process of outsourcing and how

it effectively make the business and knowledge opportunities more ease and wider.

OUTSOURCING

The concept "outsourcing" came from American Glossary 'outside resourcing' and it dates

back to at least 1981. Outsourcing sometimes involves transferring employees and assets from

one firm to another, but not always. Outsourcing is also the practice of handing over control

of public services to for-profit corporations. Two organizations may enter into a contractual

agreement involving an exchange of services and payments. Outsourcing is said to help firms to

perform well in their core competencies and mitigate shortage of skill or expertise in the areas

where they want to outsource.

In the early 21st century, businesses increasingly outsourced to suppliers outside their own

country, sometimes referred to as offshoring or offshore outsourcing. Several related terms have

emerged to refer to various aspects of the complex relationship between

economic organizations or networks, such as nearshoring, crowdsourcing, multisourcing and

strategic outsourcing.

REASONS FOR OUTSOURCING

In the early 21st century, groups of people using online technologies increased and they

began to use outsourcing as a way to build a viable service delivery business that can be run from

virtually anywhere in the world. The preferential contract rates that can be obtained by

temporarily employing experts in specific areas to deliver elements of a project purely online

means that there is a growing number of small businesses that operate entirely online using

offshore contractors to deliver the work before repackaging it to deliver to the end user. One

common area where this business model thrives is in providing website creation, analysis and

marketing services. All elements can be done remotely and delivered digitally, and service

providers can leverage the scale and economy of outsourcing to deliver high-value services at

reduced end-customer prices.

The main reasons behind outsourcing can be summarized as the following :

Reducing of the certain domestic costs such as high taxes, high energy costs,

excessive government regulation/mandates, production and/or labor costs.

Rapid growth of technology and opportunities for virtual business

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Lack of available resources locally.

Benefits of digital outsourcing such as avoiding the space for office setup, high

salary in other countries rather than the home country, facilities to work for other

countries from the home itself.

Internationalization of labor markets due to Industrialization and liberalization

Global inequality of available human resources and mechanical facilities.

Outsourcing emerged with a new wave of globalization marked by high volumes of

trade and capital flows. The increased movement of capital and goods contrasted

starkly with the barriers and protectionism prevalent throughout the World Wars

and the Great Depression during the Interwar Years.

The rise in industrial efficiency which characterized development in developed

countries has occurred as a result of labor-saving technological improvements.

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CONCEPT OF BUSINESS PROCESS OUTSOURCING (BPO)

Business process outsourcing (BPO) can be defined as the act of giving a other party

responsibility of performing what would otherwise be an internal system or service. For instance,

an insurance company might outsource their claims processing program or a bank might outsource

their loan processing system. Other common examples of BPO are call centres and payroll

outsourcing. Typically, companies that are looking at business process outsourcing are hoping to

achieve cost savings by handing over the work to a third-party that can take advantage of

economies of scale by doing the same work for many companies. Or perhaps the cost savings can

be achieved because labour costs are lower due to different costs of living in different countries.

BPO is often divided into two categories: back office outsourcing which includes internal

business functions such as billing or purchasing, and front office outsourcing which includes

customer-related services such as marketing or technical support. BPO. It provides wide range of

tactical, powerful, flexible tools which in turn helps in achieving the business objectives in a cost

effective and efficient manner. To put it in simple words a BPO (business process outsourcing) is

a process in which a company delegates some of its business processes to a other party on

payment of some fee by passing over total control of process to them. This in turn cuts the

operational costs considerably resulting into huge profits.

BPO’s are inclined to provide better customer satisfaction leading to customer retention,

increased productivity, deal with competition effectively and in turn increase profitability. There

are many kinds of work that can be outsourced to BPO’s for e.g. Call/Help Centers, Medical

Transcription, Billing, Payroll Processing, Data Entry, IT Services, Human Resources (HR)

functions, etc.

Due to the proximity of IT industry to BPO, this industry is also termed as ITES

(Information Technology Enabled Service). But, BPO doesn’t necessarily only provide IT

Services. BPO will be time and again, simply defined as, taking over non-critical business

processes or a function of those processes, as well as the people and systems associated with

them, in order to achieve service level improvements and cost savings. It is useful in leveraging

the process towards driven efficiency and achieving responsiveness, branding, customer

relationships and organizational excellence.

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ADVANTAGES OF BPO `

An important aspect of business process outsourcing is its ability to free corporate

executives from some of their day-to-day process management responsibilities. Once a process is

successfully outsourced, they get more time to, explore new revenue generation activities,

accelerate other projects, and focus on their customers.

By outsourcing their back office operations to third world countries, companies

have the following advantages:

1. Achieve cost reductions – This is made possible through process improvements, reengineering,

and use of technologies that reduce and bring administrative and other costs under control.

2. Key in on company’s main business – With the day-to-day back office operations taken care

of, the management is free to devote more time to building the company’s core businesses

3. Obtain outside expertise – Rather than recruiting and training personnel, BPO ensures that

domain experts from another company provide the needed guidance and skills.

4. Meet constantly changing customer demands – Many BPO vendors provide the management

with flexible and scalable services to meet the customers’ changing requirements, and to support

company acquisitions, consolidations, and joint ventures.

5. Achieving revenue increases – By outsourcing non-core processes, companies can focus on

increasing their sales and market share, develop new products, expand into new markets, and

enhance customer service and satisfactions.

CONCEPT OF KNOWLEDGE PROCESS OUTSOURCING (KPO)

KPO is a new phenomenon that is picking pace in India. It is “Knowledge Process

Outsourcing”. In simple words it is the upward shift of BPO in the value chain. Old BPO

companies that used to provide basic backend or customer care support are moving up this value

chain. “Unlike conventional BPO where the focus is on process expertise, in KPO, the focus is on

knowledge expertise.” KPO involves off shoring of knowledge intensive business processes that

require specialized domain expertise, thus delivering high value to organizations by providing

business expertise rather than just process expertise.

It is being claimed that KPO is one step extension of Business Processing Outsourcing

(BPO). BPO Industry is shaping into Knowledge Process Outsourcing because of its favourable

advantageous and future scope. But, let us not treat it only a ‘B’ replaced by a ‘K’. In fact,

Knowledge process can be defined as high added value processes chain where the achievement of

objectives is highly dependent on the skills, domain knowledge and experience of the people

carrying out the activity. And when this activity gets outsourced a new business activity emerges,

which is generally known as Knowledge Process Outsourcing. KPO is involved in services like

valuation and investment research, patent filing, legal and insurance etc. KPO can simply be

explained as an off-shoring of knowledge concentrated business processes that needs specialized

domain oriented expertise. Knowledge process outsourcing (KPO) is the allocation of relatively

high level tasks to an outside organization or a different group (possibly in a different geographic

location) within the same organization. Most low-level BPO jobs provide support for an

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organization’s non core competencies and entry-level prerequisites are simply a command of

English and basic computer skills. Knowledge process outsourcing jobs, in comparison, are

typically integrated with an organization’s core competencies. The jobs involve more complex

tasks and may require an advanced degree and/or certification. Examples of KPO include

accounting, market and legal research, Web design and content creation. KPO and BPO are often

conducted through off-shore outsourcing as corporations seeking the most value for the least

money source projects to countries where wages are lower. Because KPO jobs may bring in more

money to the economy as BPO, countries such as India are actively promoting development of

that industry.

ADVANTAGES OF KPO

1. Accelerate Reengineering Benefits: Reengineering aims for drastic improvements in critical

measures of performance such as cost, service, quality and speed. But the need to increase

efficiency comes into direct conflict with the need to invest in core business. As non-core internal

functions are continually put on the back seat, systems become less productive and less efficient.

Therefore, by outsourcing a non-core function to a competent provider, the organization can

realize the benefits of reengineering as an outsourcing benefit.

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2. Access to Top Class Capabilities: Good and competent providers make extensive investments

in technology, people, and methodologies. They acquire expertise by working with many clients

facing similar challenges. This combination of specialization and expertise ensures

the customers a competitive advantage and helps them avoid the cost of acquiring technology and

training.

3. Optimal use of resources: Every organization has limitations to the resources available to it.

Outsourcing allows an organization to redirect its resources, mostly human resources, from non

core activities toward activities which serve the core need of customer. The organizations can

redirect these human assets or at least the staff slots they represent for greater value adding

activities. People whose energies are currently focused on internal activities can now be focused

externally — on the customer.

4. Solution to difficult problems: Outsourcing is certainly one option for addressing the problem

of managing difficult activities requiring core technical skills. It is essential to remember that

outsourcing doesn’t imply abdication of management responsibility nor does it work well as a

solution to solve critical and suddenly erupting trouble of a company. However, a company can

outsource only those difficult problems which it understands properly because if the organization

doesn’t understand its own requirements, it won’t be able to communicate them to an outside

provider.

5. Focus on main business: Outsourcing allows a company to focus on its core business by

having operational non core functions assumed by an outside expert. Freed from devoting energy

to these non core areas, the company can focus its resources on meeting its customers’ needs.

6. Best use of financial resources: There is large amount of competition within most

organizations for capital funds. The senior management is always in a fix to decide where to

invest the capital funds. It is often difficult to justify non-core capital investments when core areas

directly related to producing a product or providing a service compete for the same money. In this

context outsourcing can reduce the need to invest capital funds in non-core business

functions .Outsourcing can also improve certain financial measurements of the company by

eliminating the need to show return on equity from capital investments in non core areas.

7. Cost reduction: Companies which attempt to do everything themselves generally incur higher

research, development, marketing and deployment expenses, and all of these are passed on to the

customer. The outsourcing can help a company to reduce its costs as an outside provider’s lower

cost structure, normally as a result of a greater economy of scale or other advantage based on

specialization, reduces a company’s operating costs and increases its competitive advantage.

9. Minimum Risk: Tremendous risks are associated with the investments made by the

organizations. Markets, competition, financial conditions, Government Regulations and

Technologies all change quickly. Further, it is very risky to keep up with these changes, especially

those in which the next generation requires a significant investment .However, in outsourcing

providers make investments on behalf of many clients, not just one and shared investment spreads

risk, and significantly reduces the risk born by a single company.

DIFFERENCE BETWEEN KPO AND BPO

Knowledge Processing Outsourcing industry is entirely different from Business processing

outsourcing industry. KPO require expertise having domain knowledge. They are highly skilled

and business experts as they handle more dexterous work which requires experience where as

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BPO industry is more about size, quantity and competence. The major difference is that BPO

insist for labour and requires less skilled employees while KPO requires highly knowledgable

employees in the area that is outsourced like lawyers, doctors, MBA and skilled engineers .The

difference between KPO and BPO can also be analysed on the bases of cost competitiveness, the

salary of KPO employee is much higher than offered to the BPO employee as the people working

for KPO are highly qualified such as Engineer, Doctor, CA, Lawyer etc. BPO provides services

like customer care, technical support through voice processes, tele-marketing, sales, etc. whereas

KPO provides in-depth knowledge, expertise and analysis on complex areas like Legal Services,

Business &Market Research, etc. BPO requires application, understanding of business and

analytical bent of mind. Employees in BPO are not- so- qualified as it focuses on communication

skills whereas KPO involves skill and expertise of knowledge workers with excellent educational

background.

KPO VERSES BPO

The demarcation line between KPO and BPO is very thin. Generally, KPO and BPO are

closely related to each other. BPO industry handles the problems in a pre-defined and pre-processed

way. Business process outsourcing (BPO) is a broad term which refers to outsourcing in all fields.

A BPO differentiates itself by either putting in new technology or applying existing technology in

a new way to improve a process.

Business Process Outsourcing (BPO) is the delegation of one or more IT-intensive business

processes to an external provider that in turn owns, administers and manages the selected process

based on defined and measurable performance criteria. Business Process Outsourcing (BPO) is one

of the fastest growing segments of the Information Technology Enabled Services (ITES) industry.

MAIN TRANSACTION PROCESSING SERVICES BY BPO

Mainly transaction processing is the area of concern in BPOs. The transaction processing

in BPO may include

Customer Support Services

Technical Support Services

Telemarketing Services

Employee IT Help-desk Services

Insurance Processing

Data Entry Services / Data Processing Services

Data Conversion Services

Scanning, OCR with Editing & Indexing Services

Book Keeping and Accounting Services

Form Processing Services:

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Internet / Online / Web Research

Banking, Financial Services & Insurance

Retail, CPG & Manufacturing

Healthcare Life Sciences & Services

Global Media & Telecom

Energy, Natural Resources & Utilities

Travel, Transportation & Hospitality

Sales & Marketing

Sourcing & Procurement

Finance & Accounting

Human Resources

Knowledge Services

Customer Relationship Management

Provident Fund and Gratuity related services

HIGH-END SERVICES PROVIDED BY KPO

KPO helps in transfer of domain specific expertise of higher level rather than process

expertise. The high-end services, which Indian KPO sector provide, are:

Intellectual Property Investigation

Patent Writing

Patent Drawing

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Invention disclosure drafting

IP Overlap Analysis

Patent Claims Mapping

Patent Proofreading

Claim Analysis

Patent File History

Legal Research Services

Legal document review

Litigation Support

Legal Coding

Legal Proofreading

Scoping

Legal Document Management

Legal Publishing

Data Research & Data Analysis Services

Online Research / Secondary Research

Strategic Market research

Equity Research

Fixed Income Research

Quantitative Analytics

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Business Research and Analytics

Financial Analytics

Market Research

Data Processing and Analysis

Web Survey Analysis

Marketing Questionnaire Design

Media Research

Online Research

Multivariate & Bivariate Analysis

Quantitative Market Research Services

Business Market Research

International Market Research

Market Research Surveys

Financial Market Research

Applied Investment Research

Financial Analysis

Financial Accounting

Business Research

Investments Research

Credit Research

Equity Research

Financial Analysis and Financial Statements

Tax Preparation

Financial Data Entry & Conversion

Competitive Business Analysis

Syndicated Research

Trend and Competitor Analysis

Company Profiling

Database Development Services

Data Enhancement

Database Hosting

Clinical Data Management

Database Publishing

Reporting and Business Dashboards

Data Mining

Medical Writing Services

Medical Writing

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Medical Editing

Medical Content Enrichment

Attribute Extraction

Medical content classification

Content Development Services

Technical Writing

Web Content writing

Fiction Writing

Proofreading Services

Editing Services

Animation And Simulation Technology

Forensic Animation

Simulation

2D and 3D Animation

Virtual Reality Systems

ADVANTAGES AND DISADVANTAGES OF OUTSOURCING

Outsourcing most commonly known as offshoring has pros and cons to it. Most of the time,

the advantages of outsourcing overshadow the disadvantages of outsourcing.

THE ADVANTAGES OF OUTSOURCING

Swiftness and Expertise: Most of the times tasks are outsourced to vendors who specialize in

their field. The outsourced vendors also have specific equipment and technical expertise, most of

the times better than the ones at the outsourcing organization. Effectively the tasks can be

completed faster and with better quality output

Concentrating on core process rather than the supporting ones: Outsourcing the supporting

processes gives the organization more time to strengthen their core business process

Risk-sharing: one of the most crucial factors determining the outcome of a campaign is risk-

analysis. Outsourcing certain components of your business process helps the organization to shift

certain responsibilities to the outsourced vendor. Since the outsourced vendor is a specialist, they

plan your risk-mitigating factors better

Reduced Operational and Recruitment costs: Outsourcing eludes the need to hire individuals

in-house; hence recruitment and operational costs can be minimized to a great extent. This is one

of the prime advantages of offshore outsourcing

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THE DISADVANTAGES OF OUTSOURCING

Risk of exposing confidential data: When an organization outsources HR, Payroll and

Recruitment services, it involves a risk if exposing confidential company information to a third-

party

Synchronizing the deliverables: In case you do not choose a right partner for outsourcing, some

of the common problem areas include stretched delivery time frames, sub-standard quality output

and inappropriate categorization of responsibilities. At times it is easier to regulate these factors

inside an organization rather than with an outsourced partner

Hidden costs: Although outsourcing most of the times is cost-effective at times the hidden costs

involved in signing a contract while signing a contract across international boundaries may pose

a serious threat

Lack of customer focus: An outsourced vendor may be catering to the expertise-needs of

multiple organizations at a time. In such situations vendors may lack complete focus on your

organization’s tasks

OUTSOURCING: SOME COUNTER WAVES

We have discussed that outsourcing has several benefits for the modern world. But there

are many counter arguments and steps are rising in many countries against the process of

outsourcing. There has been a recent overturn of the tendency to outsource. The most recent

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trends in outsourcing and offshoring have been precisely the opposite force as companies are

drifting back to perform tasks themselves and develop facilities back in their home Western

locations.

Many firms are undoing their steps in outsourcing because the consequences were not

entirely as expected. The circumstances which allow firms to unbundle the different tasks or

stages of its manufacturing process into different locations have not been fully determined.

Though the nature of the tasks plays a role determining their interconnectedness, other factors

such as innovation in the manufacturing process or advances in transport and communication

technology also affect the need for direct contact among employees. As the process which ties

tasks together within firms remains unclear, there is a degree of uncertainty about which tasks

need to remain geographically clustered together.

In many cases firms took risks experimenting with outsourcing while lacking a firm

understanding of the relationship among internal tasks and its spatial implications. Despite saving

money, companies have often faced unexpected drawbacks from outsourcing, such as

miscommunication or lower quality of intermediate products, which end up delaying the overall

production process. According to a Deloitte Consulting survey carried out in 2005, a quarter of the

companies which had outsourced tasks had to reverse their strategy. Many big companies like

Lenovo are increasingly considering turning around strategies of outsourcing. Another reason for

a decrease in outsourcing is that many jobs that were subcontracted abroad have been replaced by

technological advances.

Public opinion in the US and other Western powers opposing outsourcing was particularly

strengthened by the drastic increase in unemployment as a result of the 2007-2008 financial crisis.

In the first decade from 2000 to 2010, the US experienced a net loss of 687,000 jobs due to

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outsourcing, primarily in the computers and electronics sector. Public disenchantment with

outsourcing has not only stirred political responses, as seen in the 2012 US Presidential

campaigns, but it has also made companies more reluctant to outsource or offshore jobs

From the standpoint of labour, outsourcing may represent a new threat, contributing to

worker insecurity, and is reflective of the general process of globalization and economic

polarization

CONCLUSION

Outsourcing has grown in importance today because economic and competitive pressures

have made it imperative for organizations of all sizes to focus on their core competencies and turn

to third-parties to assume responsibility for other secondary corporate functions. Leveraging third-

party alternatives can reduce costs and improve operating efficiencies.

Outsourcing has become one of the hottest topics in the business world over the past few

years, with so many tasks in the workplace now capable of being carried out by outside parties.

The process has jumped in popularity particularly as more and more small and medium sized

enterprises have taken their first tentative steps online, in the hopes that they can get their venture

off to a flying start. Mind you, there are other ways to outsource which do not focus on web-based

operations.

The key factors which have led to a growing trend of outsourcing are Lack of expert-

labour in some portions of the business process, Availability of cheaper labour, whilst not

comprising on the quality of output and Ability and feasibility to concentrate on the other crucial

business process. These factors have specifically contributed to most of the outsourced

partners across different locations in the world. Expertise in communication capabilities,

technical expertise and favorable financial packages are the most important advantages of

outsourcing to India.

At the same time we are looking forward to the uncountable benefits regarding social

and economic, we also must consider the challenges and disadvantages caused by

outsourcing. Countries like India are focusing on the Knowledge Processed Outsourcing

rather than business Processed Outsourcing. Our government should ensure that the human

resources in our country can fully utilized for the development of our nation. Due to global

outsourcing most of well skilled indian professioners are hired by famous international companies

outside our nation and we are unfortunate to use and experience their skills.

With all these pros and cons of outsourcing to be considered before actually approaching a

service provider, it is always advisable to specifically determine the importance of the tasks

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which are to be outsourced. It is always beneficial for an organization to consider the

advantages and disadvantages of offshoring before actually outsourcing it.

REFERENCE

http://www.mathrubhumi.com/education/index.php

http://articles.economictimes.indiatimes.com/keyword/outsourcing

Knowledge and Process Management - Volume 10 / Issue 1 by Andrew Kakabadse and

Nada Kakabadse

http://www.emeraldinsight.com/doi/abs/10.1108/17538290810857457

https://en.wikipedia.org/wiki/Outsourcing

http://www.entrepreneur.com/encyclopedia/outsourcing

http://blog.blackboard.com/outsourcing-in-education-friend-or-foe/

https://www.linkedin.com/pulse/20140606011953-6070925-kpo-vs-bpo-what-are-their-

differences