Strategic Management: Advantage And Disadvantages Of Outsourcing

Introduction

Strategic management is a scientific approach of framing, administering and evaluating decisions across several functions to achieve defined objectives of an organization. It allows corporate organizations to adapt themselves to changing scenarios in the niche without diluting the focus on goals and attention to the main objective. Strategic management helps organization staying relevant to the times and makes it adaptive. In fact, an effective strategy gives an edge over competitors. The process involves planning, analysis, formulation and execution.

Some of the important business strategy management tools are value chain that involves regulating connected bunch of activities that create value by manufacturing goods and services

Some of the advantages of outsourcing strategy are:

• Faster completion of work and great expertise: It’s not surprising to know that usually companies outsource their work to vendors who have rich knowledge and specialization. As the vendors spend their maximum time working on their niche project, they can manage time and complete the work swiftly than internal employees. Concentrating on core process rather than the supporting ones: Outsourcing the supporting processes gives the organization more time to strengthen their core business process

• Sharing risks: Risk analysis is a vital factor in determining the result of the project. Given the expertise of the vendor, one can expect that the vendors take care of risk mitigation mechanisms and fetch desirable results.

• Minimized Operational and Recruitment costs: Outsourcing avoids the requirement in hiring new professionals; hence operational and recruitment costs can be reduced to a great

Consequently, the quality of output might get affected. In order to maintain a fine balance between reaching objectives and maintaining premium quality, outsourcing has become the most reliable option one can use.

Factors influencing outsourcing

Like aforementioned, outsourcing is not solely influenced by money. There are many other driving factors. Some of them are

• Analyzing and realizing organization long term goals and objectives

• Objective focused vision and plan

• Picking out the suitable vendor

• Current management relationships

• Organized