Unformatted text preview: Chapter 12
Outsourcing project work
Outsourcing > the transferring of business functions or processes to other foreign companies.
Advantages of outsourcing project work include:
1. Cost reduction > Companies can secure competitive prices for contracted services,
especially if the work can be outsourced offshore.
2. Faster project completion-> Work can not only be done more cheaply but also faster.
Furthermore, outsourcing can provide access to equipment that can accelerate completion
of project tasks.
3. High level of expertise-> A company can focus on developing its core competencies
and hire firms with the know how to work on relevant segments if the project.
4. Flexibility > Organizations are no longer constrained by their own resources but can
pursue a wide range of projects by combining their resources with talents of other
Disadvantages of outsourcing project work include:
1. Coordination breakdowns > Break downs are challenging, and those challenges are
exacerbated by physical separation with people working in different buildings, different
cities, and possibly different countries.
2. Loss of control-> Because the core team depends on other organizations that they have
no direct authority over.
3. Conflict-> Projects are more prone to interpersonal conflict since the different
participants do not share the same values, priorities, and culture.
4. Security issues > Confidentiality is a concern for companies have to be very careful
when outsourcing processes like payroll, medical transcriptions, and insurance
5. Political hot potato-> Foreign outsourcing of wok is perceived as a major cause of
underemployment and US companies are under increased pressure to keep jobs local.
Request for proposal (RFP)
Outline for the development of a detailed RFP
1. Summary of needs and request for action-> background and a simple description of the
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- Fall '16