SEVICES: GOING GLOBAL?

LE THI MY LINHBABAIU10198TRAN THI THANH THUONGBABAWE10534

11.3SERVICE OUTSOURCING

BENEFITS AND DRAWBACKS

A •TERMINOLOGY

B •BENEFITS

C •DRAWBACKS

D •EXAMPLE OUTLINE

A. TERMINOLOGY

SERVICE Huge room for growth The rate of increase Outsourcing service function in all

companies Higher skill level More mobile

SERVICE VS MANUFACTURING ACTIVITIES

B. BENEFITS

DCs LDCs

1.Boost productivity- Reducing expenditures- Increasing quality of the service and

delivery=> Higher profit, more capital

For DCs

2. Allow to restructure- Focusing on core activities- Reducing work loadÞ Increasing productivity and value of the

production

For DCs

3. Increasing the competitiveness- more chances to enter the market

=> creating a new international division of labour in service production => increasing competitiveness => improving quality of labor & products

For DCs

1.Jobs opportunity- Cheap labor cost in LDCs - More countries enter the market Þ More jobs created

For LDCs

2. Higher skilled jobs : based on the characteristics of outsourcing

3. Infrastructure investment : DCs invest in LDCs

4. Cost saving : economy to scale

For LDCs

Some pictures about outsourcing

For DCs For LDCs

C. DRAWBACKS

1. Job loss- Sharing overall labors- Abroad outsourcing

=> Need to have some policies

For DCs

2. Loss of managerial control- Turning control among companies

3. Hidden costs- Additional charge not included in the contract

4. Threat to security and confidentiality

5. Quality problems -The outsourcing company will be motivated by profit

For DCs

1. Relocation of outsourced service activities - Always moving to more competitive LDCs

2. Negative impacts on culture and tradition

For LDCs

Outsourcing takes many forms In Vietnam :

- Famous for software outsourcing destination- Rank 20th in “excellent outsourcing

destinations”- provides a great pool of skilled software

developers => meet the demand

D. APPLICATION

expends the outsourcing service in software, designing websites…. :

- Outsourcing at your company - Offshore project - Dedicated offshore software development

center

Hoangnguyen informatic

Application development Applications integration Desktop management

The service at Hoangnguyen :

 Main areas ( strength ) : informative technology in : Financial and accouting Trade Government’s activities Health service And other kinds of management Partners : Van Hien University Nha Trang informative technology center Solution limited company ….

BENEFITS DRAWBACKS boost productivity Job lossfocus on core activities Loss of Managerial Controlnew international division of labour

Hidden Costs

Threat to Security and Confidentiality

Quality Problems

SUMMARY

DCs

BENEFITS DRAWBACKS Job opportunity Relocation of outsourced

service activitiesCreation of higher skill jobs involving better pay and, training and transferable skills

Negative impacts on culture and tradition

Infrastructure investment

Cost saving

LDCs

http://tqasolution.com/dich-vu/out-sourcing.html

http://www.businessweek.com/magazine/content/06_05/b3969401.htm

http://www.outsourcing.org/ http://www.computerworld.com/s/topic/72/O

utsourcing

REFERENCES

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