Outsourcing is the process by which an organization contracts with third-party service providers so that the third party provides certain business functions to the organization. An organization looks for competitive vendors who can provide the services that it requires. Before giving a vendor some function to run in the organization, some factors must be considered depending on the area that the vendor will occupy in the organization. Some processes are maintained in-house while others are outsourced. Producing a travel magazine involves several processes such as editorial, publishing, photography, printing, distribution, advertising, layout, editing, articles, human resources, finance and accounting, customer care, project management, acquisition, and others. An organization that produces such a travel magazine needs to outsource a number of processes so that the magazine works. The vendor takes the contract for a specific period of time after which the contract can be renewed or another vendor hired. Outsourcing some processes helps an organization save both time and money. However, outsourcing any process has some advantages and disadvantages that are associated with it. This paper will seek to analyze the processes that an organization that plans to be producing travel magazines will outsource and those that it will keep in-house so as to enhance the magazine business. The processes that will be used to acquire vendors and the pros and cons of outsourcing are also discussed in the paper.
The Magazine Business
Producing a travel magazine that will be competitive in the market is very crucial. This is because there are already other organizations that are producing travel magazines and are well established. The organization will be producing travel magazines that are produced and distributed in the United States for the middle-income population. The travel magazine that will be produced is expected to be the best in the United States. There are several processes that are involved in running a travel magazine. Some of these processes can be outsourced while others can be carried out in-house (John, and Barbara, 2007, p.6).
|Articles||These are articles that will contain information that will be relevant and of benefit to the readers. The articles will contain factual information and different articles in the magazine will contain independent information. An article will be published within the first few pages and will contain the opinion of the editors on the publications in the magazine|
|Publishing||This is the process by which the information will be made available to the customers|
|Photography||This is a process by which photographs will be taken and posted in the magazine.|
|Distribution||This is the process by which the published travel magazine is made accessible to the readers|
|Advertising||This is the process by which the public is made aware of the presence of the travel magazine. Advertising will also help in promoting the magazine.|
|Editing||Editing is the process by which all the information in the magazine including photographs is modified so that it is acceptable. The wrong information will be corrected and all information organized. Condensation may also be done if necessary.|
|Layout||The layout helps in compiling the text and graphics in the magazine so that it is impressive and attractive. The magazine will have an organized layout so that it does not confuse readers.|
|Customer Care||Customer care will be responsible for concerns by customers and all that relates to the products as the customers may demand.|
|Project Management||The management of the project will ensure that all the operations in the organization are run properly and are directed towards achieving the overall goal.|
|Research and Development||This is the process by which some research will be done to help the organization know its current status and the factors that might be hindering its developmental goals.|
|Accounting||This is the process by which the organization will collect the financial information and arrange it in an acceptable manner. It will help the organization evaluate its financial status.|
Processes that will be outsourced
The organization that will be producing travel magazines will be managed by the two owners. The organization will need many individuals to manage and run the operations of the organization (Leavy, 2004, p23). Due to the financial constraints that the organization is experiencing, only a few processes will be outsourced so that the organization emerges successfully. The organization does not have the capacity to publish the magazine. The machines that are required to publish the magazine are quite expensive and the organization does not have the money that is required. The management in the organization will look for a competitive publisher who will publish a quality magazine at an affordable price. Outsourcing the process of research and development will enable the organization to determine the way forward. This process needs to be outsourced because outsourcing will give information that is not biased. Individuals from the organization can be influenced by the management or the mission of the organization while doing research but an independent vendor will produce the data as it is. The process of distribution will be outsourced. This is because the organization does not have the necessary resources that will be used to purchase vehicles for operation. A distribution company that has vehicles for distribution will be hired on a contractual basis before the organization purchases its own vehicles. Another process that will be outsourced is accounting. This is because major accounting processes will be carried out only a few times in one year. A few individuals will be employed in the organization to perform the recording and managing the financial information in the organization. A different third party will be hired to audit so that any cases of fraud in the organization can be identified. Another process that the organization plans to outsource is advertising. This is because the process of advertising needs experts and there are some advertising companies that have been formed for purposes of advertising. The company will do the research and design the advert that will be most attractive to customers. They will also determine the best means that will be used for advertisement and the best time to advertise.
Processes to be performed In-House
The organization will employ experts to be producing the articles that will be published in the paper. Editing and will also be maintained in-house. This is because the organization only needs to employ a few experts for editing after the articles have been compiled. Another process that can be maintained in-house is photography. Individuals employed by the organization will be going out to take photographs. Other processes that will be maintained in-house include layout, customer care, project management, and others. The process of managing the project will be taken by the owners of the project. The customer care process will be designed by the human resource management where individuals will be trained to always handle customers in the right manner (Steven, 2006, p.31).
Pros and Cons of outsourcing
|Business Process||Outsourcing Pros||Outsourcing Cons|
|Publishing||Publishing will help the organization in that it will not invest in assets.||Outsourcing publishing has a long-term negative effect on the organization. The organization may end up spending more money than it could have spent in the long-term if it bought its own machines.|
|Distribution||This will again help the organization in that the organization will not invest in assets||There could be cases of unforeseen charges and changing requirements|
|Advertising||It will help save time and energy that will be invested in other areas within the organization. It will also increase the competitiveness of the organization.||It is not a must that the adverts that are developed will meet the intended objective. This may bring differences between the two organizations.|
|Accounting||Outsourcing accounting will reduce fraud in the organization||It is quite expensive and this reduces the profits that the organization realizes.|
|Research and Development||Outsourcing this one helps in the release of findings and discussions that are not biased||The organization may become dependent on the vendors for everything which is quite dangerous for the organization.|
In the process of outsourcing, the most important aspect is a selection of competitive vendors. If an organization selects a vendor who is not competitive, the organization will fail to meet its objectives. For the five processes that will be outsourced, each process will have an independent vendor. In selecting vendors to carry out the functions on behalf of the organization, certain criteria will be followed. Those parties that will be interested will be requested to send their applications expressing their interest. Short-listing will take place where those who will meet the minimum requirements will be called for an interview. Experience is one of the factors that each company that will be interested should have (Maurice, 2003, p.132). Any organization that will be interested must not have had disputes with other organizations when offering their services. The organization should also have worked with a large organization because the organization has an intention to develop into a very large organization. For the publisher, the organization must have published magazines for not less than three years. They should be capable of producing quality magazines that are durable. The organization to provide research and development should also have done the research, not for less than three years. The accountants should have experience in accounting and auditing for large firms. The vehicles for the distributors should be in good condition to travel to different parts of the country regardless of the weather conditions.
Procurement Planning Phases
The organization needs to acquire vendors in a way that will be cost-effective. Procurement is the process by which the bet providers will be acquired at the right quantity and quality, at the right time, right place, and from the right source (Garry, 2004, p.54). The companies that are interested will be requested to bid. The company with the lowest bid will be selected. If the selected company cannot render the services required, the organization will go for the next company that has the best price. If not competent, the process will continue until the organization gets the best vendor who can provide the functions required. The phases include information gathering, supplier contact, background review, negotiation, fulfillment, consumption, maintenance, and disposal, and renewal.
|Information Gathering||One and a half months|
|Supplier Contact||Two months|
|Background Review,||One month|
|Fulfillment||One and a half months|
|Consumption, Maintenance, and Disposal||One month|
Outsourcing helps an organization become flexible in its operations. An organization has several processes that are necessary for the running of the business. Some of these can be outsourced while others can be performed in-house. The process of acquiring vendors is also important.
Garry, J. D. (2004). Outsourcing: Training & Education. London: McMillan Publishers, 45-67.
John, K. H. and Barbara, M. M. (2007) Business Process Outsourcing 2nd Edition, New York: John Wiley and Sons, Inc, 02-16.
Leavy, B. (2004). Outsourcing Strategies: Opportunities and Risk. Strategy and Leadership, 32 (6): 20-25.
Maurice, F. G. (2003). Strategic Outsourcing: A Structured Approach to Outsourcing Decisions. Oxford: Oxford University Press, 122-143.
Steven, M. V. (2006). Outsourcing: A Guide to Selecting the Correct Business Unit, Negotiating the Contract, and Maintaining Control of the Process. New York: Wiley & Sons, 24-44.