Scribd
Upload
206 views

Module1 Lesson3

The document discusses the advantages and disadvantages of outsourcing from the perspectives of employers and employees. Some key advantages for employers are optimizing resources, leveraging expertise, and benefiting from economies of scale. Advantages for employees include work-life balance, professional growth, and financial independence. However, outsourcing also has disadvantages such as added costs if processes are undefined and loss of full control over resources. Employees may also face shifting schedules and dealing with difficult customers. Overall, outsourcing has benefits but also risks that must be mitigated.

Uploaded by

Jhen-Jhen Geol-oh Baclas
Copyright
© © All Rights Reserved
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
206 views

Module1 Lesson3

The document discusses the advantages and disadvantages of outsourcing from the perspectives of employers and employees. Some key advantages for employers are optimizing resources, leveraging expertise, and benefiting from economies of scale. Advantages for employees include work-life balance, professional growth, and financial independence. However, outsourcing also has disadvantages such as added costs if processes are undefined and loss of full control over resources. Employees may also face shifting schedules and dealing with difficult customers. Overall, outsourcing has benefits but also risks that must be mitigated.

Uploaded by

Jhen-Jhen Geol-oh Baclas
Copyright
© © All Rights Reserved
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
You are on page 1/ 4

Course No.: SMFBPO1 Fundamentals of BPO Mrs. Anie G.

Villa
NIPSC-SOM-BSBA Subject Teacher
First Semester 2020-2021

Module 1: IT-BPM Industry Overview

Lesson 3: Advantages and Disadvantages of Outsourcing

Introduction
In this module, you will learn the advantages and disadvantages of outsourcing

Read the discussion and answer the questions that follow. Perform the activity and
submit via messenger or email @[email protected].

Learning Outcomes: Upon completion of this Module, you shall be able to:
1. Enumerate the advantages and disadvantages of outsourcing.

Discussion:

Every coin has two faces. And in this instance advantages and disadvantages goes both
ways – to the company or to the employer, as well as to the employee.

 Advantages of Outsourcing –Employer Perspective


o The service provider (BPO company) determines most efficient number of
resources, process, and supervision to achieve output.

This is about resource optimization. No organization has infinite resources. It is


critical in at least two ways: firstly towards the successful completion of client
requirements, and secondly with regard to ensuring profitability, growth, and
sustainability.

o Service Provider may have more expertise/capability than the buyer


o Buyer can leverage economist of scale of the Service Provider.
o Service Provider may have more expertise/capability than the buyer
Example:
Technical support: example Dell, Convergys
For technical support, service providers will already have an established
track record in successful resolution of such concerns given their in-depth
expertise in the related or required technologies

Accounting: example JPMorgan Chase &Co. , CITI


For accounting, global companies like Citi and JP Morgan Chase & Co are
prime samples of service providers that execute to the highest standards
with regard to a highly confidential subject matter – the financials of a
client.

Animation: example Top Draw animation


For animation, visionary producers and directors are not technically
animators themselves, they are essentially great story-tellers who finance
and guide a film to its completion. They work with animation studios or
service providers who do – pre as well as post production.

o Buyer can leverage economies of scale of the Service Provider.


Example:
 Technical Infrastructure
The service provider has a sizable and proven capacity for online storage,
data processing and data connectivity.
1|MODULEI_Lesson3
 Human Resources
This does not refer to the sheer volume or number of warm-bodies. But
more importantly it refers to the associated knowledge, skills,
competencies and professionalism of those human resources.

 Technical Expertise
It is the convergence of the first and second bullets or items. This includes
the skills to correctly and efficiently diagnose and troubleshoot a client’s
concern potentially without the need to seek additional support and
assistance from an escalation or a transfer.

 Advantages – Employee Perspective


o “Work Abroad, Live here”
-Be near your friends and family
-Work in the country and support Philippine growth
This shows the benefits given the Filipino’s value and appreciation of the close-
knit family system.

o Professional growth
You are potentially able to expand your business expertise as you interact in
different group settings, work with professionals of different ethnicity, cultural
background, and management style. This exposure and experience is a wonderful
learning opportunity.

o Financial Independence
More often than not entry-level salaries in the IT-BPM industry are significantly
more attractive than entry level positions in other industries. This holds true even
in instances wherein the job function is primarily similar. Many industries
aggressively incentivize their staff in sales. Often being in sales requires
personnel to a lot. They transport sample products and marketing materials. With
the advancement of telecommunication, sales specialists can accomplish their task
by communicating with customers via online platforms and the phone.

o Employee Assistance
Many IT-BPM companies provide world-class facilities, amenities, and benefits
that is more than what is required by the government. When safety and well-
being of the employees are at risk, many IT-BPM companies make sure that their
employees are looked after.

o Enjoy your favourite food.


Though seemingly funny and simplistic, is the key social activity in our culture.
Eating for us Filipinos is an opportunity to strengthen relationships – at work,
with friends and at home. Incentives may include opportunity to savor your
favourite dish.

 Disadvantages of Outsourcing- Employer Perspective


o Cost can be higher because provider may add premium for risk in case processes
are not well defined.
 Example Problem : Vaguely defined task as “provide clinic service.”
 Example Solution: Redefine tasks
2 full-time nurses and 1 full-time doctor, from 8:00AM to 5:00PM,
providing emergency medicine (to what extent), and, emergency care
equipment (or not)
o Buyer does not have full control of resources doing work
 Example: Can your agency provided office assistant also do this extra
errand – bring pet to the vet clinic, bring clothes to the dry-cleaner, pick-
up kids from school?
2|MODULEI_Lesson3
 Solution: Do not use outsourced office assistant like your personal
assistant.
o Fraud
o Data security or piracy
o Identity theft
o Corporate espionage
o Quality and safety assurance
o Efficiency and reliability – durability and robustness of equipment used.

 Disadvantages – “ Employee Perspective”


o Shifting schedule (possible night shift)
- Gives you the opportunity to pursue your passion and interest during the
day.

A shifting schedule with the possibility of working at night can easily be viewed
as a disadvantage. However, what this scheduling opens up for many is the
opportunity to pursue other activities during the day. For many members of the
IT-BPM industry this means; participating in community development initiatives,
supporting charities, helping out and supporting a family venture, or simply enjoy
their favourite fitness facility without the crowd of other patrons who still happen
to be in school or at work. These are just a few benefits.

o Dealing with irate customer


- There is training support on how to deal with irate customer
- There is also floor support
- Companies provide facilities and activities to help you unwind.

Dealing with irate customer is not unique to the IT-BPM industry. This situation
can arise fifty percent of the time in any transactional relationship. What is certain
is that you will receive expert training on how to effectively handle such
situations. In instances that you may require support or upon a customer’s
request, your peers – supervisors and managers are committed to deliver –
customer satisfaction. They will develop your skills to perform your job with
greater independence. Lastly, many companies provide for facilities and activities
to help employees handle work-related stress. There are game rooms, break-out
rooms to power nap, a basketball court, video gaming consoles, a meditation
room, a clinic or infirmary, having an anti-burn out party, having sporting
competitions, and many more. These are all prime examples of facilities and
activities geared towards better employee well-being.

Summary

Outsourcing both has advantages and disadvantages to the company or employer and
employee.

The advantages of outsourcing from the employer’s perspective consists of the


following: 1) The service provider (BPO company) determines most efficient number of
resources, process, and supervision to achieve output; 2) Service Provider may have more
expertise/capability than the buyer; 3) Buyer can leverage economist of scale of the Service
Provider; 4) Service Provider may have more expertise/capability than the buyer; and 5) Buyer
can leverage economies of scale of the Service Provider. From the employee’s perspective,
outsourcing is advantageous in terms of 1) they can work abroad while living in the country; 2) it
will be the opportunity for professional growth; 3) financial Independence; 3) employee
assistance; and 4) have the opportunity to enjoy his favourite dish.

3|MODULEI_Lesson3
The disadvantages on employer’s perspective may include higher cost, having no full
control of resources doing work while on the part of the employee, it could be the shifting
schedule especially night shift and dealing with irate customer.
Assessment

Answer the question below:

1. Give one (1) disadvantage of outsourcing from an employer’s perspective


and discuss some possible solution to handle this disadvantage. (25 points)
2. Give one (1) disadvantage of outsourcing from an employee’s perspective
and discuss some possible solution to handle this disadvantage. (25 points)
Your answer shall be evaluated using these criteria:

 Content . . . . . . . . . . . . . . . . 10 pts
 Organization of ideas . . . . . 10 pts.
 Language facility . . . . . . . . . 5 pts.
Total . . . . . . . . . . . . . . . . . . 25 points

TO DO:

Interview three (3) people – friends, neighbors, brother, sister, who are currently works
at an IT-BPM or BPO company. You may submit this as a video or audio file.

References:

Fundamentals of Business Process Outsourcing 101 Teacher’s Guide. IBPAP

-END OF MODULE 1, LESSON 3-

4|MODULEI_Lesson3

You might also like