The Contrast Between Management Consulting and Outsourcing Management Services
A financial perspective
Leandro F Pereira PhD PMP ROI, Nelson Santos António PhD, Carlos M Jerónimo PMP
Business Research Unit – BRU IUL
ISCTE - Instituto Universitário de Lisbon
Lisbon, Portugal
Abstract— In a world in which the most effective way to deliver services is often discussed and many times it is the customer who ends up defining the delivery model of the companies, it becomes important to analyze and compare the tendency and financial sustainability among the companies that delivery management services in a different format, whether that is through consulting projects or via outsourcing services. This investigation was conducted by clustering the …show more content…
Through the analysis of the gains of many outsourcing companies, there are many non-core activities undertaken by these companies that promise to their customers reducing costs and focus on their business activities that create direct value [1]. Much research has been done on how companies choose which activities to do internally or externally. There is a lot of repetition of simple cost / benefit arguments that are difficult to measure. What is the long-term cost of letting the company managers themselves learn from making a strategic plan rather than hiring a specialized, referenced consulting firm on the subject? What is the benefit of using Outsourcing in 80% of our non-core activity? Do we need a company to help us think or execute? Or even both? Issues not impossible to give, but difficult to justify in a standardized and scientific way for many organizations. On the contrary, for service providers the big question remains on knowing the best model to follow, it is certain that if the model sold so it's good, but can the model improvement bring best turnovers? It's also true that are outsourcing companies that often only provide body shopping services and their business model are easily replicated and they have almost no competitive advantage …show more content…
However, there are some associations similar to FEACO and exclusive to outsourcing such as the International Association of Outsourcing Professionals (https://www.iaop.org) and the Outsourcing Institute (http://outsourcing.com/). In fact there are thousands of articles with the word outsourcing in the title and without containing the word consulting (to date 78200 listed in Google Scholar). Probably and also because the Management Consulting concept already mentioned above, also presents different concepts and it was possible to find in literature several generalist information. Outsourcing and IT outsourcing, generally speaking reflects "the use of external agents to perform one or more organizational activities" [15]. The author Monica Belcourt [16] states that Outsourcing happens when a company contracts another company to provide services or products of a noteworthy capacity or movement. Work that is customarily done inside is moved to an outer supplier, and the representatives of the first association are frequently traded to the specialist organization. Outsourcing contrasts from alliances or partnerships, here are profit sharing. Outsourcing is defined to [17] as the act of obtaining semi-finished products, finished products or services from an outside company if these activities were traditionally performed internally.
A financial perspective
Leandro F Pereira PhD PMP ROI, Nelson Santos António PhD, Carlos M Jerónimo PMP
Business Research Unit – BRU IUL
ISCTE - Instituto Universitário de Lisbon
Lisbon, Portugal
Abstract— In a world in which the most effective way to deliver services is often discussed and many times it is the customer who ends up defining the delivery model of the companies, it becomes important to analyze and compare the tendency and financial sustainability among the companies that delivery management services in a different format, whether that is through consulting projects or via outsourcing services. This investigation was conducted by clustering the …show more content…
Through the analysis of the gains of many outsourcing companies, there are many non-core activities undertaken by these companies that promise to their customers reducing costs and focus on their business activities that create direct value [1]. Much research has been done on how companies choose which activities to do internally or externally. There is a lot of repetition of simple cost / benefit arguments that are difficult to measure. What is the long-term cost of letting the company managers themselves learn from making a strategic plan rather than hiring a specialized, referenced consulting firm on the subject? What is the benefit of using Outsourcing in 80% of our non-core activity? Do we need a company to help us think or execute? Or even both? Issues not impossible to give, but difficult to justify in a standardized and scientific way for many organizations. On the contrary, for service providers the big question remains on knowing the best model to follow, it is certain that if the model sold so it's good, but can the model improvement bring best turnovers? It's also true that are outsourcing companies that often only provide body shopping services and their business model are easily replicated and they have almost no competitive advantage …show more content…
However, there are some associations similar to FEACO and exclusive to outsourcing such as the International Association of Outsourcing Professionals (https://www.iaop.org) and the Outsourcing Institute (http://outsourcing.com/). In fact there are thousands of articles with the word outsourcing in the title and without containing the word consulting (to date 78200 listed in Google Scholar). Probably and also because the Management Consulting concept already mentioned above, also presents different concepts and it was possible to find in literature several generalist information. Outsourcing and IT outsourcing, generally speaking reflects "the use of external agents to perform one or more organizational activities" [15]. The author Monica Belcourt [16] states that Outsourcing happens when a company contracts another company to provide services or products of a noteworthy capacity or movement. Work that is customarily done inside is moved to an outer supplier, and the representatives of the first association are frequently traded to the specialist organization. Outsourcing contrasts from alliances or partnerships, here are profit sharing. Outsourcing is defined to [17] as the act of obtaining semi-finished products, finished products or services from an outside company if these activities were traditionally performed internally.