OUTSOURCING

Boxing Clever - Case Study

Boxing Clever - Case Study

Introduction

Boxing Clever is the title of the article written by Nick Martindale. It is based on how the organizations tend to divide their major contracts in smaller ones. In this modern era, organizations have been involved in lot of operational activities that they have begun outsourcing some of their activities. The concept of outsourcing has emerged in 21st century. It is the procedure of giving contract for any internal business process to any other company, known as third party organization. This saves a significant amount of time as well the cost associated with the activity. The process of outsourcing sometimes also involves transferring the human resources and assets of a company to another one. However, this is not the case in all the situations.

Outsourcing is considered as a fashion these days, and most of the companies are commonly involved in outsourcing their internal business activities. This provides more opportunities for the third party companies, and helps boost the economy of the country, where it is followed quite usually. This helps in increasing the employment opportunities. In addition to that, it also allows a cross border trade between the companies, and helps increase the opportunities in global market for the companies. Companies from other regions of the world tend to perform particular business activity for a primary company. This increases the value of Information technology, in the current scenario, even more. The process of outsourcing is also known as Business Process Outsourcing (BPO).

Critical Analysis

With the rise of business process outsourcing there has also been seen a bit of slowdown in past couple of months. Everest group, one of the global sourcing companies, have researched that the number of transactions have been declined from the figure of 516 in previous 12 months to 411 in the second quarter of 2012. The company further identifies that the breakdown is quite visible that this slowdown is due to the industries of manufacturing, defense, and public sector.

The Downfall

The dropping number of transactions in the public sector is notable, since it was an election year. In Europe, it was the financial uncertainty which has resulted in the decline of transactions in the public sector. However, the addition of newer sectors such as travel, technology, hospitality, and health care has helped in stemming that decline in the transactions of business process outsourcing. The demand of customers is rising like anything. KPMG paints has also surveyed about identifying the fact of increasing demand. Their research included the analysis of senior executives of the big and medium sized companies. They find out that more than half of their respondents had expected that the demand of the customers is about to increase in the coming years.

Key Issues

The reason for the decline in the volumes is also due to the fact that during boom of outsourcing in the early 2000's, the companies have made long-term deals with the third party companies, and now they are reassessing those ...