Outsourcing is the act of giving an inside work to an outside company. This might seem to some people a bit confusing in terms of that if a company can not do something is that means you do not suppose to go to them and take a job from them. In a more general view , yes this is true ,but when it comes to the truth. Company A is not specialize in making databases ,so for this it asks Oracle to make it for them , not the whole project just the database. In this term company A will make sure that the database is built in much more effecint way since it is the most important part of their job and they do not want to miss this part of the project up since it is very crusal. This will get us to some of the main problems in this field. If they are handing their most crucial part of the project ( in some cases) what happen if this company is not as good as company A though it is?
Problems
As for the problems we will only take the major problems that affects more general outsourcing companies and their partnership.
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Cost
It all comes to the cost. Any company that outsource their job their first consirn is “money” as any other companies. When dealing with oursourcing, the outsroucing company will ask for a good amount of money to insure that any of the dealt problems are solved ( since no one outsrouce without having a problem, mostly). This unfortinatly is always the problem. Outsourcing companies will always fight to take a job from large companies and this will always have a “cheap” company that will sell it services for a convising amount. This will make any company that want to outsource jumb into the line to ask for it. Not knowing that this is not the right company to deal with. They might get the job done , but is it worth dealing with much more complicated problems in the future?
Rushing to meet a tight deadline
Another problem when dealing with outsourcing is time. Time always is more important than even money itself. This is what always happens. Company A give company B a job to do (Outsourced) ,but what company A want is for this job to finish within 3 weeks. Company B agrees because they want the money, but company B in the middle of development face a problem that needs more than 3 weeks to be solved correctly. What will happen that company B will not solve the problem ,but rather find a way around it ,but by that time everything has gone out of the plan. Eventually everything will fall apart as it has from the beginning.
Poor communication
Communication one of the major part in life, not just in business. Having a poor communication meaning you can not transfer the correct idea that you have in your mind to the person in front of you. Meaning this will result in the misunderstanding of your thoughts and imagination. Having this as a problem means you will never get what you want. Not connecting to the outsourced company and not transferring the right idea about the problem means paying more to fix problems that may happen in this structure. Remember we always have a deadline which in itself a problem as we said ,but also adding the problem of poor communication it means everything will run out of your hands and will always result in nothing that what the company wants.
“he State of Indiana wanted to outsource modernizing its welfare processing system. They wanted to transform it, introduce a new service delivery model to reduce costs and fix violations. The goal was to allows people to use the system online, be able to make a claim personally or over the phone.”
A deal worth of 1.6 bilion dollar that ended up in a loss to the state of Indiana. I t was a horrable way time for IBM a leading company in the IT bussniss. IBM is one of the leading leaders in the market yet they still faced this crisis that lead to the unimaginable loss to both sides. This means that this is not just depending on how a big of a company you are. If you are not aware you will loss no matter what.
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