BUS 203: BUSINESS ENVIRONMENT

Section: 03

Fall 2013
Oct 13, 2013

L9

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Todays topic outsourcing

Todays topic
Outsourcing
1.
2.

Justin Paul. 2008. Business Environment, pp.335-348

Hand-out posted on class page

Outsourcing
The trend

Outsourcing
Definitions
Offshoring means getting work done in a different country.
Outsourcing refers to contracting work out to an external
organization.
Rationale
Improve productivity, cut down cost and save time
Business Process Outsourcing (BPO)
Business process outsourcing (BPO) is the contracting of a specific business
task, such as payroll, to a third-party service provider. Usually, BPO is
implemented as a cost-saving measure for tasks that a company requires but
does not depend upon to maintain their position in the marketplace.
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Outsourcing
Rationale Behind Outsourcing and the debate
Industry analysts forecasted: 3.4mill jobs will be outsourced in 2015!
Three main factors:
1. The emergence of world-class service providers
2. Technology the notion of placenessness
3. Competition
The debate:
Can all jobs be outsourced?
The increased demand
Economic restructuring being competitive; What can be done?
Can this be claimed as the inevitable phase of market economy?

Outsourcing
Gainers and Losers
Gainers
Cost savings
Higher performance
Better deal for consumers
Repatriated profit
New Markets
Faster deployment
Level the playing field
Losers
Displacement or loss of jobs
Overestimation of savings
Loss of specialization and sustainable labour supply
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Outsourcing
Bangladesh Trend

The overall size of the IT/ITeS industry in Bangladesh

stood at ~250 million USD in 2010 (KPMG Whitepaper 2011)

Bangladesh thoughts?
Real prospects
Areas to improve
Risks?
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