Over the years, various organizations have started outsourcing strategies, but many organizations are still affected in achieving their goals; productivity in some countries is low in quality and quantity, profitability is unstable, and capacity utilization is seriously insufficient. The following research work identified the impact of outsourcing strategies:
- Back-office activities
- main activities
- accounting activities
- support activities on the performance of small and medium-sized enterprises SMEs.
The survey research design was adopted by Benue State, Nigeria. The stratified random sampling technique is used to select respondents for the main data sources obtained through well-designed and self-managed questionnaires. In addition, auxiliary data is obtained from the financial records of ten (10) selected SMEs. Use multiple regression techniques to perform statistical analysis on variables. At the end of the survey, the study found that: outsourcing of administrative activities (such as accounting, payroll, billing, order processing, payment processing, cleaning services, security services, and other administrative activities); outsourcing of major activities (such as manufacturing, purchasing, warehousing, sales) .
Personnel and customer services
Such as financial Reporting, taxation, processing have no significant impact on the performance of SMEs. Therefore, this study recommends that SMEs adopt more outsourcing strategies to benefit from cost savings/restructuring, which translates into better customer service and profit; in addition, they must adopt and take seriously the following steps
Such as effective communication and Monitoring
Manage outsourcing processes to better reap the benefits of this maintenance/growth strategy.. Background The business environment in todays world is vibrant. Rapid changes and increasingly complex business issues are leading to critical changes in organizations and the way they do business. A fact is still correct; every organization has its own goals; in addition, the success of an organization is measured by the level of achievement of its goals. To achieve the goals set in the context of technological progress,
- complex business processes,
- explosion of knowledge, and continuous growth in demand,
- organizations look for strategies to improve performance.
Therefore, you will reflect on the capabilities of your employees (employees), their technical knowledge, business processes, etc., and answer whether you can use existing field resources to achieve your goals or find complementary methods. By striving to meet the needs of customers and shareholders, organizations can seek methods that have a comparative advantage.
Therefore, it focuses on basic capabilities and seeks to reduce operating costs, viewing outsourcing as the right strategy. It involves outsourcing business functions. It replaces the companies own activities by subcontracting with external agents. Therefore, the innovative management and development of outsourcing activities becomes the responsibility of the companies external agents. Outsourcing gives organizations the opportunity to focus their core competencies in definable business areas of excellence and provide customers with unique value Dominguez.
It is also worth noting that today’s outsourcing is no longer limited to peripheral activities such as cleaning, catering, and security. pointed out, outsourcing also includes key areas such as design, manufacturing, marketing, distribution, and information systems. Outside Nigeria, well-known outsourcing companies include Kodak, which outsources IT operations.
International Business Management Corporation (IBM); As a result, Kodak acquired a higher-quality IT system and performance for less money than I did also pointed out that Boeing was the worlds largest commercial jet manufacturer in 1997, occupying 60% of the world market. Despite its large market share, Boeing still faces competitors such as Airbus’s European Industries Corporation.
The melee between the two giants has led to high operating costs, prompting Boeing to look for ways to cut costs. In 1993, Boeing conducted a company-wide review of its manufacturing or purchasing decisions. To achieve this decision, Boeing decided to outsource certain parts to China. It is worth noting that Boeing avoids outsourcing wing production because it believes that doing so may leak valuable technology to potential competitors. pointed to some examples of companies outsourcing operations. who have management knowledge and experience and can provide quality services and operations. It also stands out in the banking industry.
United Bank of Africa (UBA) plc, Access Bank plc and other universal banks in Nigeria have outsourced automated teller machines (ATM) to a company called inter-switch. According to all standards, all organizations identified so far are large organizations. Therefore, it should be noted that all forms of organizations are involved in one form or another of outsourcing, regardless of their size (regardless of size). It is common to see SMEs collect contracts from customers instead of doing them themselves, but outsource the contracts to other organizations, regardless of their size, to execute them for them. An example of such outsourcing in Nigeria can be seen in some hotel outsourcing security equipment and security services that focus on providing hotel services.
Most of the time, they have one or several accountants whose job is to record transactions and then obtain the services of external accountants who perform complex calculations and accounting preparations and audit their operations. pointed out that other areas of SME outsourcing are employee training, advertising and other support activities.
Focus the organization on its core capabilities, so as to experience effectiveness by saving costs, reducing capital investment within the company, better responding to changes in the business environment, and ensuring greater competition between suppliers of higher-quality goods and services in the future And efficiency, reducing the risk of technological change, etc. Consistent with the previously established advantages of outsourcing, some organizations (some of which have been mentioned above) have ventured into outsourcing. However, as pointed out, although they have been subcontracting for many years, some organizations are still affected in achieving their goals; the quality and quantity of production capacity of some enterprises are not high, the quality and quantity of production capacity of some enterprises are not high, profitability is unstable, and production capacity is not high.