Describe Benefits Of Outsourcing To Any Organization

Individual Assignment: Case Study
Name
Institution Affiliation
Outsourcing
1 Identify/describe 3 benefits of outsourcing to any organization? (6 marks)
Outsourcing is a cost-saving strategy. The cost is lower with better quality of the services delivered.
Increased efficiency due to the competence of the contracted firm in dealing with such services.
Improved focus on key areas of business processes thus, leading to higher value-added products and services by an organization.
2 Identify/describe 3 risks of outsourcing to any organization? (6 marks)
Sharing of pertinent information with a supplier would lead to exposure of intellectual property to manipulation.
Implications of quality compromise or failure would occur causing damage to company reputation and profits.
Failure by the supplier to deliver. This affects firm operations especially under transportation where the dependency on production and sales is high.
3 Explain 3 benefits (6 marks) and 3 risks (6 marks) the Wilson Brothers face in proceeding with this outsourcing decision.
Benefits
It will lower Wilson Bothers’ transportation cost by thirty percent. Transportation cost exists as an area of concern due to rising petroleum products in the firm.
It will lower the burden of seeking labor and mitigate against cultural barriers at other branches. Further, outsourcing may aid in streamlining labor and contract policies that are currently absent in the organization.
Wilson Brothers will be able to concentrate on core areas like branding, pricing, research and development of their products to facilitate growth and profitability.
Risks
It will lead to enforcement of labor agreements and unionization which may affect the firm’s structure and operations leading to rigidity in making strategic decisions.
Interference with quality and timely delivery by the supplier may negatively impact on Wilson Brothers’ brand giving their competitors a competitive advantage in the market.
Lower growth through reduced and regulated working hours which will affect the ten to twelve working hours culture employed by the brothers and the...