Outsourcing (Research Paper Sample)

Outsourcing
Name:
Institution:
Outsourcing
Summary
Outsourcing refers to an exercise used by companies to reduce the costs by transferring portions of work to third parties. When used properly, outsourcing can effectively enable a business to achieve an effective cost-saving strategy. Purchasing a product from companies with comparative advantages can be more affordable. This allows a company to save production costs. IT companies have many structural options that depend on the variables they want to optimize (Kalakota, 2013). Companies that cannot develop data internally or hire data scientists consider outsourcing data analytic services. Some companies employ data scientists from small, but expansive pool of talents. Some sponsor employees to go back to school to acquire advanced skills and knowledge in data management and analytics. Research shows that none of the approaches effectively addresses the obligation. It shows only one-third of the global data-related jobs will come through outsourcing (Kalakota, 2013).
Wal-Mart Stores Inc. operates retail stores globally in different formats. This has compelled the firm to consider analysis of its business data. However, the company management realized that their analytics is deficient and it would be difficult to establish the needed capabilities internally. Consequently, the firm decided to outsource their business analytical services. Wal-Mart Company decided to outsource it has to outsource the business data due to various reasons raised by the company executive officers.
Reasons Why Wal-Mart will outsource
The company wants to lower the operational and labor costs. The company revenue has seen a significant drop over the last two trade periods. The management decided to outsource so as to increase its revenue recognition and deliver significant savings. Another reason is to focus on their main business procedures. Many operations lag behind due to officers concentrating too much on the data processing, which become time consuming. Outsourcing will help the company concentrate on its main objectives. Wal-Mart also wants to free its internal resources. The managers realized the company resources could go into effective purposes that will benefit the company in the end. Some data management became complicated and difficult. The company wants to outsource to wash their hands off the difficult task.
The company also wants to mitigate the risks involved when data handling happens internally.by avoiding the risks, the company will avoid the losses that may occur due to internal data handling. The company wants to use outsourcing as a method to expand and gain access new world markets. The company has many branches offshore and wants to cover the whole world. They will help the company take the production and service delivery point to their end users. The company does not have all the modern resources needed to analyze data internally. This has pushed the company to ought outsourcing since outsourcing companies have the required resources to complete the task with effective results.
Need for Outsourcing
Data analytics refers to the process of inspecting, cleaning, modeling, and transforming business data with the aim of producing information that is useful and supportive in decision making. Data science refers to an area that incorporates and builds on theories and techniques to create data products (Morgan, 2007). A company should outsource business analytics for several reasons. If a company outsources its analytics, it is able to focus on its core business. A company can outsource its non-core but important data analytics procedures. This allows it to enjoy high quality work done externally by professionals. Consequently, it does not spend excess money in hiring analytics experts and training.
A company accesses analytic specialists with distinctive data analytics skills and experience. Specialists who have exposure in specialized training accomplish the process in a successful manner and can work cohesively as an extended branch of the business (Morgan, 2007).Technological analytic outsourcing will allow Wall-Mart Company to eliminate the need of invest in technologies involved in data analytics services and infrastructure. Most of the analytics solutions allow a business to enjoy the benefits analytics can deliver effectively.
Issues Involved in Decision-Making
Understanding the post-contractual procedures and decision right represents some of the significant issues to Wal-Mart managers. Lack of a clear understanding makes operators involved unable to prepare a worksheet together after the contract signing. Deciding on the best organizations from which to outsource data analytics is also a significant problem. Many companies provide business analytics services. Therefore, it is difficult to choose the best that adequately addresses a company`s business needs. Deciding on professionals to deal with is another issue (Chhabra, Kothari, &Sarkar, 2010). In outsourcing, a company experiences challenges in determining credibility of potential firms or their respective employees. This has become a major issue to Wal-Mart. It is difficult to predict future working relationships, which might result in poor performance on the part of the outsourced firm.
Available Options
Wal-Mart Company management can research on companies and experts involved in business analytics. The companies and experts that have the best outsourcing reputation in the industry should taken seriously because they have experience and good results in their previous work. Doing the analytics internally is another option. If the company finds it difficult to find and implement a good outsourcing procedure, it is better if it does the work internally to avoid unexpected future implications.
The Wal-Mart management can evaluate and measure the benefits and costs of outsourcing against performing the activities internally. The implementation of the highest benefits achieved will bring in mo...