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A Role Of Outsourcing in Business

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Summary

Following the expanding nature of business of Four Ways organization, it was thought that it was prudent that a research be done on the viability of outsourcing advertising services; some of the Company non-core competencies. Having done the research, the following is a report of the research done. It comprises of the introduction of the report, data collection methods, and findings/recommendations. The report has indicated clearly that outsourcing is necessary at least according to respondents. Therefore, the organization should embrace outsourcing in future.

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Introduction/background

In this information age, the customer is increasingly becoming knowledgeable and aware of the services on offer for them in the market. They more often than not use the various information channels to know the services available and, which are the best for that matter. This is coming as a challenge to the businesspersons offering various goods and services because it is driving competition higher. Businesses therefore need to adopt cutting age competitive strategies if they are to survive the competition dynamics in the market. Such strategies include cost reduction and quality improvement. Apparently, these seem to be the front competition factors for organizations. Large organizations such as multinationals are increasingly finding it hard to manage these from within because their size is working against them. This now takes us to the next emerging big thing; organizational outsourcing. This is assigning non-core business activities to outside parties who otherwise have necessary skills to accomplish them while concentrating on core organizational activities (Barrar, Peter, and Gervais, 2006).

This paper is presentation of a business report I carried out for Four Ways organization, which happens to be my organization. The report was focusing on outsourcing advertising services to determine whether our increasingly expanding organization is better off adopting outsourcing of such services. The report therefore presents the data analysis from the market, findings and recommendations. It has as well advantages and disadvantages of outsourcing to an organization. This report has will be presented to the Four Ways managing director for possible action as he may deem fit concerning the organizational future especially as far as advertising is concerned (Lacity, Mary, and Willcocks, 2001).

Thesis statement

Outsourcing is the emerging new way of non-core organizational activity management and therefore every organization should consider it at some level of its operations in one way or another. Therefore, this report investigates and presents importance of outsourcing advertising services by Four Ways LLC.

This research covered the existing companies, which have already rolled outsourcing of services such as advertising services and recruitment services. From the data available before and after implementation of outsourcing, we could draw comparisons and come out with fundamental differences of between the two sets of information. The differences either formed the basis for arguments for advertisement services outsourcing or basis for argument against outsourcing. Information was collected mainly through data mining on the company websites. However, some interview through questionnaire was conducted to the senior members of organizations being studied (see sample of the questionnaire used; appendix 1). It was worth noting that, even as the information was gotten from other organization some unique characteristics favored the organization in question (Barrar, Peter, and Gervais, 2006).

Factors that favor advertisement outsourcing in Four Ways LLC

Four ways is an expanding company we last decade has seen immense growth in almost all aspects; geographically it has opened branches not to mention acquisition of subsidiaries across the country and therefore the organization is big enough. If it chose in house execution of non-core activities such as installation of internet cables, it may not get enough time and resources to use in offering its core services, which is high-speed internet connection.

The market is also replete with expertise on the non-core services that Four Ways Company needs to outsource. In this understanding, even if the organization goes outsourcing most of its non-core competencies, it will get superior expertise out there and cheaply for that matter; otherwise, in-house execution would not afford such at such a price. The large capital base of the organization will favor outsourcing since it will make it credit worth to be able to sustain large number of outsourced suppliers all at once (Barrar, Peter, and Gervais, 2006).

Best practices in outsourcing, which the organization can practice if it decides to go the outsourcing way.

During the research, the following best practices were established, which could help the organization benchmark their outsourcing if it chooses to adopt it.

  1. Establish clear objectives right from the beginning of the lirocess
  2. Get the communication right and never act on information, which is not clear to you
  3. Do not go to the negotiation table with a closed mind-olien uli to all liossibilities but ensure that you do not lose in the negotiation. Learn how to trend off one thing for another.
  4. Do not lose reslionsibility even when you outsource
  5. Make sure you establish the right service to outsource

The following is some data and analysis

Data analysis

Four organizations participated in this research and in each organization, I interviewed five people and therefore, my total respondents were 20. The following is data obtained from the interview.

Question Yes No

Does your organization practice any form of outsourcing 12 4

Does your organization outsource advertising services 10 6

Do you think outsourcing can increase efficiency in service delivery and hence customer satisfaction 14 2

Do you think outsourcing can increase organizational productivity 16 0

Do you think advertisement outsourcing can increase organizational sales compared to in house advertisement 15 1

Graph representation of the above information

From the above graph, is apparent that outsourcing is being favored in most organizations probably due to its advantages.

Advantages of outsourcing advertising services

Outsourcing of advertising services has numerous advantages to the company and the customers who are the principle users of advertisement information. Below are some of the advantages discovered during the research on various organizational web sites (Click, Rick, and Thomas, 2005).

a) Expertise- when you outsource these kinds of services, of course you will be doing it from a provider whose core competence is to offer advertising services. In this understanding therefore, it is likely that you will get the kind of expertise you may not be able to mobilize in-house. This expertise will also be accompanied by professionalism in carrying out the advertisement. Hiring a marketer who understands you product and its market dynamics is likely to pay off while you concentrate on your core business (“Chron”, 2014).

b) Cost minimization-in-house marketing may not guarantee direct or indirect income for that matter. From time to time, it experiences high and lows. However, notwithstanding the season, a business will still be required to pay its marketing staff their full salaries and any allowances that might accrue. As an advantage of outsourcing, the marketing department is allowed to tame overhead marketing costs, replacing it with a need based model of marketing where a marketer is hired when a need arises. As the business owner, you could make a do with the available marketing resources and as the outsourced marketing activities generate income, then you can establish yourself in the business with the flexible budget and when income is generated then you smile all the way to the bank (“Chron”, 2014).

c) Customer satisfaction-Since marketing is not the core business of the organization, then it may increasingly become hard to study and understand the customer needs to understand how to meet their needs better. This is not the case with outsourced party because for them to succeed they have to carry out frequent surveys to know what the customers’ needs and to fulfill. The company will also be spared all the time it takes competing with other companies since the outsourced company will fight all its battles

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