Information technology is an essential part of business processes that need technical competence beyond the scope of current management. Third party to manage IT functions for the company. Outsourcing contract is part of the concept of a business process to a third party who has specific skills and services. It allows organizations to focus on their efficiency and manage resources efficiently. When considering the economics of the industry and emerging industries such as IT, business process outsourcing imposes huge market potential.
Competitive advantages are an advantage that a firm has over its competitors, allowing it to generate sales or margins larger or retain more customers than its competition. There are many competitive advantages including cost firm structure, product offerings, distribution network and customer support. Give the company a competitive advantage over its rivals advantages and the ability to generate greater value for the firm and its shareholders. More sustainable competitive advantage, the more difficult it is for competitors to neutralize the advantage.
There are two types of competitive advantage and that is benefits differential advantage, advantage, or cost advantage, is the ability of a firm to produce a good or service at a lower cost than its competitors, which gives the firm the ability to sell goods or services at prices lower than the competition or to generate a greater margin on sales. Differential advantage is created when a product or service is different from its competitors and the firm is seen as better than a competitor's products by customer.
Among the competitive advantage to be gained through outsourcing are:
2.1 Access to better technology and new technology
With the implementatio...
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...ompeting organizations to observe this competitive advantage, they will acquire or develop resources to implement the planned strategy through direct duplication or substitution of any form without incurring any cost to the organization first found it.Any competitive advantage gained first mover will compete to be taken over by competitor, and they have to compete with their competitors to copying resources used in the competition.
2.7 Mobility
Mobility is the ability of a company to acquire the resources needed to easily find copying the competitive advantage to its competitors. The types of resources such as hardware and software, it is easy to come by and therefore highly portable and possible to generate competitiveness. Although the resources are rare, when it's possible to buy or rent sources, and the mobile source cannot contribute to a sustainable advantage.
Outsourcing simply means acquiring services from an external organization instead of using internal resources (Butler, 2000). By using outsourced resources, organizations can gain a competitive advantage by utilizing contingent staff to accomplish strategic goals without incurring the fixed overhead. By focusing on the leading edge and highly specialized skill sets, outsourcing providers can often offer higher quality services, or at a lower price than the client organization. Typical reasons for outsourcing go beyond simple contingent staffing. Outsourcing providers are able to maintain economies of scale with regard to specialization (...
Recently outsourcing has been in the news, especially during political election years. It seems to be a phenomenon that is causing much concern among the population. But exactly how is outsourcing effecting both workers and businesses? And is it as big of a problem as politicians describe?
The proponents of contracting out assume that outsourcing in the IT sector is useful in strategic, technological, and economic reasons. (Gonzalez, Gasco & Llopis, 2009) They believe that outsourcing enables an organization to get the same or better services with lower cost. First, strategic advantages enable organizations to refocus on strategic and core functions, and provide flexibility for organizations because organizations need not to concern about routine tasks (Gonzalez, Gasco & Llopis, 2009). OPPGA (1998) also support these strategic advantages. It asserts that outsourcing can provide organizations with great flexibility in personnel and facilities in short-term projects. Outsourcing providers can provide better services for clients since they usually use new and developed technologies. Second, proponents think that outsourcing gives organizations opportunities to access to technology and reduce technological obsolescence without large investments (Gonzalez, Gasco & Llopis, 2009). Lastly, Pros assume that contracting out can save s...
A manager should assess the competitive power of a company’s resources and capabilities by applying the VRIN tests for sustainable competitive advantage. VRIN stands for Valuable, Rare, Inimitable, and Nonsubstitutable. If a resource or capability passes the first two tests, this concludes that the resources or capabilities can support a competitive advantage. The last two tests define whether the advantage can be sustained. A resource or capability is seen as valued if it relates closely to the company’s strategy. When this is the case these assets are perceived as rare when they are not widely available. Resources and capabilities are perceived as inimitable if they are hard to copy and being non-substitutable if there are no threats of substitutes
Cost advantage: by better understanding costs and constricting them out of the value-creating activities. Main focus of this strategy also known as cost leadership is to offer goods and services at lower cost than the competitors. To follow this strategy a company also consider these approaches- tight cost control, economics of scale in production and also cost minimisation.
The competitive advantage that can be gained by the companies through IS/IT outsourcing is Improved business processes. IT outsourcing an identification method and rigor of IT resources that can help the business run smoothly. It can control the development of the project budget and expenditures. It also can promote information technology investment proposals from outside and provide skilled individuals in managing IT resources available in the company. Through these companies are able to provide appropriate information and report to the company. This can give competitive advantage to the company. For example, expenditures, progress, and issues the company can be viewed and controlled.
Competitive advantage is the advantage for the competitors and gained by the offerings from the consumers that have the greater value either by the low prices of the products and by providing the benefits and services to the consumers that denotes the high price. It is a set of the innovative and different features of the company and the products and services sale to the consumers so that company can achieve the targets what they have decided and it is the betterment for the enterprise in the competitive market (Porter, 2011). There are three determinants which can be used in the competitive advantage that what the company produce for their consumers, their target market that what they have to achieved and the competition from the other entity
The assignment research objectives were (a) to gain insight into securing strategic partnerships in the information technology (IT) arena; (b) to understand the choices made to reduce information and security risks by exploring the different outsourcing techniques, and; (c) to understand how business process associated with outsourcing will stimulate awareness on how the process is interlinked with human behaviors. The topics covered include an evaluation of the specifications of information security consultants to become strategic partners assisting in the reduction of information or security risks, an examination of four factors that were omitted in the specifications that add value to the selection process, and an explanation of the value of the four factors.
...can be key in improving customer sales. If a customer does not see the value of an organization's product, that customer may begin to shop for a competitor's product based only on price. Price is not the only competitive advantage an organization may have, but if it is not able to articulate the non-price value, it can significantly lower the organization's competitive advantage.
of a firm to attain new forms of competitive advantage (Müller, 2011). It is due to these
A sustainable competitive advantage is making your company have a unique value position, in a competitive environment, while defending the supported proposition. These advantages need to be constantly updated in order that the competitors remain on the back foot. Unable to keep abreast of the shifting advantages and the difficulty to imitate or implement changes that take place. Such properties of sustainable competitive advantages that can be changed, include;
We can define competitive advantage as simply what a given company excels best at. This could be the distinguishing factor as to why consumers purchase from your company and not the competition. This could also be understood from the perspective of quality that a business can create for the consumer.
Competitive strategy is the approach that an organisation takes in order to gain advantage over its competitors. According to Porter, there are two major sources of competitive advantages: costs and differentiation. Cost-based competitive advantage involves reducing production costs so that an organisation can earn higher profit margin or offer products at lower price compared to competitors. Differentiation-based competitive advantage involves offering unique properties that are not offered by competitors’ products. Differentiation allows an organisation to charge a premium for their products because they offer additional benefits to buyers.
The human resource management stands for the management of an entity’s workforce and all that relates to the workforce. The significance of human resource management includes recruitment, orientation, and the ability to retain employees. The human resource management with other managers utilizes these practices in order to produce a solution that relates to challenges. A competitive advantage refers to the business ability to gain the advantages of its economic activities that, it recognizes the organization’s ability to survive and overcome competition in the marketplace. This paper will discuss the concept of competitive advantage in human resource.
Furthermore, outsourcing is the other concept that will be beneficial for my business. Business process outsourcing (BPO) helps the bank to improve efficiency and cut the cost. I would like to outsource the need associated with technology that will help to be more flexible, proficient and more rapidly market. It helps to get cheap labor, better quality standard and to get new ideas to grow my business successfully and to exchange technologies.