Syllabus

Advantages of local and global outsourcing compared with in-house production;  12 ATAR

Purpose of outsourcing data management;  12 ATAR

 Background

• In-house means that a product or service is provided within the company.
• Outsourcing means that the product or service is provided by another company or individual.
• Local outsourcing means provided within the state or country.
• Global outsourcing means provided by another country on the globe

In-house (sometimes called insourcing)

• If a company is to make a product (or service) it will need employees to do it.
• Employees need to be paid a minimum wage.
• Employees need holiday pay.
• Employees need long service leave (in Australia)
• Employees need sick leave.
• All of these costs add up, so some companies don't produce things in-house anymore. They outsource.

Outsourcing

• This is getting another company to do part of your normal production.
• Outsourcing is paying for another company to do part of your normal work.
• An example of this is providing help desk support to a company.
  • Telstra in Australia provide many communications systems including broadband internet
  • Telstra used to have help desk staff in-house, providing employment for Australians
  • Telstra no longer have in-house help desk support to its customers. This is a popular trend for many companies.
  • Telstra use outsourcing. here 
  • Optus use outsourcing. here

Local Outsourcing

• This is outsourcing within your own country.
• This provides jobs to locals. 

Global Outsourcing

• This is outsourcing to a company in another country

Advantages of Outsourcing

• It is cheaper.
• Workers in some other countries get paid less than in your country. This brings down operating costs.
• Specialist help. These companies can become experts at providing this service.
• A company can focus on core business.
• Upskilling workers in an IT company can be costly. Outsourcing can keep employee costs down.
• Staff flexibility. You can stop outsourcing when business slows down. You can start outsourcing when business picks up again.

Purpose of Outsourcing Data Management

• Outsourcing data management services are in the image below from outsource2 india
• The main purpose of outsourcing data management is to save costs.

• data entry can be done by specialists thus reducing the need for data entry staff in a company
• data handling can be done by specialists with benefits of cost saving of staff and other business overheads
• with these advantages come some risks (see National Archives of Australia for more details on bullets below)
  • storage location may be unknown
  • there may be unauthorised access to the data
  • privacy may be lost
  • the data may be lost

 For you to do

 1. What is outsourcing and how can it benefit a company?

2. What is the difference between local outsourcing and global outsourcing?

3. What is the purpose of outsourcing data management?

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