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Overview of Outsourcing

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Topics

  • Introduction to Human Resource Management
  • Job Analysis and Manpower Planning
  • Staff Recruitment
    • Recruitment
    • Characteristics of Recruitment
    • Sources of Recruitment: Internal Sources
    • Sources of Recruitment: External Sources
    • Differences Between Internal and External Sources of Recruitment
    • E-recruitment
    • Overview of Staff Recruitment
  • Staff Selection
    • Meaning and Definition of Staff Selection
    • Difference Between Selection and Recruitment
    • Steps in Employee Selection Process
    • Psychological Tests
    • Interviews
    • Types of Interviews
    • Limitations of Interview
    • Overview of Staff Selection
  • Staff Training
    • Training
    • Comparative Overview of Training, Education, and Development
    • Importance of Training
    • Types of Training
    • Preparation of Training Programme
    • Methods and Techniques of Training: On-the-Job Training
    • Methods and Techniques of Training: Off-the-Job Training
    • Types of Employee Training: Key Distinctions
    • Hindrances to Training
    • Benefits of Training to Employer and Employee
    • Overview of Staff Training
  • Staff Morale
    • Meaning and Definition of Staff Morale
    • Characteristics of Staff Morale
    • Morale Productivity Matrix
    • Measurement of Morale
    • Factors Influencing Morale
    • Determinants of Morale
    • Methods of Raising Morale
    • Indicators of Low Morale or Disadvantages of Low Morale
    • Passive Effects of High Morale or Advantages of High Morale
    • Importance of Team Work
    • Measures for Building Effective Teams
    • Overview of Staff Morale
  • Staff Motivation
    • Meaning and Definition of Staff Motivation
    • Motivation Process
    • Characteristics of Staff Motivation
    • Difference Between Motivation and Morale
    • Importance of Staff Motivation
    • Factors Influencing Motivation
    • Difference Between Financial/Monetary and Non-Financial/Non-Monetary Incentives
    • Maslow's Theory of the Hierarchy of Human Needs
    • Herzberg's Two Factor Theory
    • Critical Appraisal of Herzberg's Theory
    • Relationship Between Maslow and Herzberg Theories
    • Overview of Staff Motivation
  • Staff Remuneration
    • Meaning and Definition of Staff Remuneration
    • Money Wages and Real Wages
    • Methods of Wage Payment: Time-Rate System
    • Methods of Wage Payment: Piece-Rate System
    • Distinction between Time-Rate and Piece-Rate System
    • Wage Records
    • Various Staff Benefits
    • Gratuity
    • Types of Leave
    • Overview of Staff Remuneration
  • Staff Leadership
    • Meaning and Definition of Leadership
    • Distinction Between Leadership and Management
    • Importance of Leadership
    • Leadership - Qualities of a Good Leader
    • Leadership Styles
    • Difference between Different Styles of Leadership
    • Leaders: Born or Made?
    • Leadership Continuum
    • Situational Leadership
    • The Managerial Grid
    • Overview of Staff Leadership
  • Staff Appraisal
    • Performance Appraisal
    • Potential Appraisal
    • Objectives of Performance Appraisal
    • Importance of Performance Appraisal
    • Method of Performance Appraisal
    • Appraisal by Results
    • Appraisal by Superior Staff
    • The 360° Appraisal
    • Overview of Staff Appraisal
  • Staff Promotion and Transfer
    • Meaning and Definition of Promotion
    • Benefits of Promotion
    • Limitations of Promotion
    • Open and Closed Policy of Promotion
    • Dry Promotion and Upgrading
    • Demotion
    • Requirements of a Sound Promotion Policy
    • Bases of Promotion
    • Meaning and Definition of Staff Transfer
    • Need and Purposes of Staff Transfer
    • Types of Transfer
    • Is Transfer a Punishment?
    • Transfer Policy
    • Overview of Staff Promotion and Transfer
  • Staff Separation
  • Emerging Trends in Human Resources
  • Business Communication
    • Communication
    • Importance of Communication in Business
    • Elements of the Communication Process
    • Oral or Spoken Communication
    • Written Communication
    • Distinction between Oral Communication and Written Communication
    • Gestural Communication
    • Visual Communication
    • Distinction Between Gestural and Visual Communication
    • Internal Communication
    • External Communication
    • Distinction Between Internal and External Communication
    • Formal Communication
    • Informal Communication or Grapevine
    • Distinction Between Formal and Informal Communications
    • Horizontal Communication
    • Vertical Communication
    • Diagonal Communication
    • Barriers to Communication
    • Overcoming the Barriers to Communication
    • Current Trends in Business Communication
    • Overview of Business Communication
  • Business Correspondence
    • Needs and Functions of Business Correspondence
    • Elements and Components of Business Letters
    • Essentials of a Good Business Letter
    • Types of Letters
    • Overview of Business Correspondence
  • Reports and Report Writing
    • Meaning and Definition of a Report
    • Characteristics of Reports
    • Purposes or Functions of Reports
    • Essentials of a Good Report
    • Format of a Report
    • Types of Reports
    • Overview of Reports and Report Writing
  • Various Business Entities
  • Sources of Business Finance
  • Globalisation
  • E-Business
  • Outsourcing
    • Concept of Outsourcing
    • Parties Involved in Outsourcing
    • Concept of Outsourcing
    • Business Process Outsourcing (BPO)
    • Knowledge Process Outsourcing (KPO)
    • Legal Process Outsourcing (LPO)
    • Overview of Outsourcing
  • Business Regulators and Intermediaries
Estimated time: 27 minutes
CISCE: Class 12

Key Points: Concept of Outsourcing

  • Outsourcing means contracting certain business functions or processes to an external agency or third party.
  • It helps companies use the expertise and specialised services of outside service providers.
  • Outsourcing services are usually cheaper as specialised firms operate on a large scale.
  • It allows companies to focus on their core activities, thereby improving efficiency.
  • In outsourcing, there are mainly three parties involved – the outsourcer (company), the outsource (vendor), and the service provider.
CISCE: Class 12

Key Points: Parties Involved in Outsourcing

  • The outsourced is the external agency that agrees to perform specific business functions.
  • The outsourcer is the company that hires the external agency to carry out certain tasks.
  • The service provider is the agency or individual who actually performs the assigned work.
CISCE: Class 12

Key Points: Advantages and Disadvantages of Outsourcing

Advantages of Outsourcing

  • To the Outsourcer: Focus on core activities, cost reduction, less investment, and access to expert services.
  • To the Outsourced: Earning income, expanding client network, and better use of expertise and experience.
  • To the Service Provider: Better monitoring of performance and clear understanding of process costs.

Disadvantages of Outsourcing

  • To the Outsourcer: Risk of high fees and leakage of business secrets.
  • To the Outsourced: Uncertain repeat business and responsibility for maintaining quality standards.
  • To the Service Provider: Need to train employees and manage additional responsibilities.
CISCE: Class 12

Definition: Business Process Outsourcing

According to Gartner, "Business Process Outsourcing is the delegation of one or more IT enabled business processes to a third party that owns, administers and manages the business process according to a defined set of matrics".

CISCE: Class 12

Key Points: Business Process Outsourcing (BPO)

  • Business Process Outsourcing (BPO) means transferring certain business processes to an external agency for better efficiency and management.
  • It usually involves outsourcing non-core activities, such as security, housekeeping, payroll, or customer support.
  • The outsourced agency is generally a third-party firm, though sometimes a company may create its own captive unit to handle such processes.
  • The external agency manages the day-to-day operations of the outsourced function according to agreed terms and standards.
  • The service provider performs the work on a contractual basis and charges a fixed fee for the services rendered.
CISCE: Class 12

Key Points: Knowledge Process Outsourcing (KPO)

  • Knowledge Process Outsourcing (KPO) means outsourcing high-level knowledge work to external experts to improve quality, efficiency, and reduce costs.
  • It is the higher-end of BPO and focuses on knowledge expertise rather than routine process work.
  • In KPO, there is no fixed procedure to solve problems; experts develop their own methods and solutions.
  • It mainly covers non-core but specialised activities such as research, data analysis, legal services, and consultancy.
  • KPO requires highly skilled professionals with proper knowledge, experience, and analytical abilities.
  • India has become successful in KPO due to cost advantages, skilled workforce, and operational efficiency.
CISCE: Class 12

Difference Between BPO and KPO

Basis of Difference BPO KPO
Level of Expertise Low level of industry or domain expertise High level of industry or domain expertise
Nature of Process Repeatable processes, require quick learning Non-repeatable processes, require regular learning
Client Involvement Low involvement with clients High involvement with clients
Workforce Large workforce, can go up to thousands Smaller workforce with tighter teams
Billing Rates Low hourly billing rates High hourly billing rates
CISCE: Class 12

Key Points: Legal Process Outsourcing

  • Legal Process Outsourcing (LPO) means outsourcing legal work of a company to specialised law firms.
  • Business firms outsource legal matters because they may not have expertise in all types of laws.
  • LPO covers areas such as labour laws, taxation, corporate laws, funding laws, and marketing laws.
  • Companies hire specialised law firms for tasks like patent registration, trademark protection, and intellectual property rights (IPR) matters.
  • LPO is becoming popular because legal compliance is complex and companies cannot afford to violate laws.
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