A PAPER ON EVALUAION OF INSOURCE & OUTSOURCE OF … · OF INSOURCE & OUTSOURCE OF MANPOWER. There...

ISSN (PRINT): 2395-7786, (ONLINE):2395-7794, VOLUME-1, ISSUE-1, 2015

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A PAPER ON EVALUAION OF INSOURCE & OUTSOURCE OF MANPOWER SELECTED COMPANIES IN ANDHRA PRADESH

1Mr. B. Sudheer Kumar, 2Dr. N. Kumara Swamy, 3Ms. M. Sukeerthi Prajwala, Assistant Professor, Professor, Student of MBA,

Dept of MBA, Vaagdevi Institute of Technology & Science (VITS), Proddatur, Kadapa (DT), A.P. 1. ABSTRACT

The paper was done at Creative Soft ware Solutions. The present study makes an attempt to draw a profile of EVALUAION OF INSOURCE & OUTSOURCE OF MANPOWER. There has been a tremendous rise in the importance of the Human Resources (HR) department within the company structure. It has become one of the fastest growing sectors in India. It has redefined the ways of the business .It has emerged as a key factor in changing the trends of the future HR. Once Human Resource Outsourcing (HRO) was simply called payroll, today its influence stretches from top to bottom. None of the department in company is untouched by its presence. In an outsourcing one company contacts a vendor that has the requisite skills, know- how, manpower, technology and the resources to perform a function or a group of function at a required or a predetermined cost. It comprises from payroll, evaluation of employee performance, to the smallest decision taken in the company. In recent past years there has been a steep rise of HR outsourcing. The main reason for this is to cut down the costs. The suppliers presently are not just looking for transactional-based functions such as payroll and pensions administration, but also ‘full service’ HR, which includes almost everything that an HR department is supposed to do. The HR vendors are now pushing the concept of ‘total value’. This means encouraging companies to outsource more and more important decisions and processes relating to HR. Business process outsourcing (BPO) advisory firm Everest Group has estimated

that a third of all such deals involving outsourcing training and development, 28 per cent including performance management and 12 per cent including the outsourcing of some elements of HR strategy will be outsourced. Apart from Human Resource Outsourcing (HRO) there are other horizontal BPO’s in areas such as finance and accounting. Usually the less important functions or the non core functions are outsourced while the firms still keep the important or the strategic functions such as budgeting and management analysis insource. 2. INTRODUCTION: - INTRODUCTION OF HUMAN SOURCE:- Human resources play a very crucial role in the development process of an economy. The economic development of the organization in developing countries is closely inter-woven with the level of development of human resources. It is said that all development comes from the human mind. The quantity and quality of human contribution are entirely dependent upon the human body and mind. The rich physical resources of organization cannot achieve any prosperity unless it is properly organized with rich human resources. The human resources are, therefore, to be developed and properly organized in order to bring about economic development in the organization as well in the country. It should be noted that human resources are responsible for the transformation of traditional economies into modern industrial economies and also for the existing levels of economic developments in different countries. The phenomenal growth achieved by a country like Japan, poor in its natural resources, can be

INTERNATIONAL JOURNAL OF PRORESSES IN ENGINEERING, MANAGEMENT, SCIENCE AND HUMANITIES


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attributed to its rich human resources. In essence, “the difference in the level of economic development of the countries is largely a reflection of the differences in quality of their human resources. The key elements in this proposition are that the values, attitudes, general orientation and quality of the people of a country determine its economic development”. At the micro level, human resource is the most valuable asset in the organization and not the money or physical equipment. It has, in fact, come to be recognized as an important economic resource. Therefore, human resources are to be developed, nurtured and properly organized in order to bring about prosperity in any country.

Human resource is the total knowledge, skills creative abilities, talents and aptitudes of an organization’s work force, as organization has the values, attitudes and beliefs of the individuals involved. Human factor in organizations also gained significance due to the fact that most of the problems in the modern organizations are human and social in nature rather than physical, technical or economic. It is people who can make a difference and who can have an ever lasting impact on the survival and functioning of organization.

INTRODUCTION OF OUTSOURCE AND INSOURCE:-

This research is aimed at analyzing the current state of the HR outsourcing & insourcing of manpower in India and the same trends that are prevalent in world. Today, in this era of globalization there is high degree of competition in all areas. One very important trend in the recent times has been the growth of human resource outsourcing. Rapidly changing market dynamics and global competitive pressures have caused organizations to spend more time focusing on their core business. Organizations are fast realizing that they can't be all things to all people. So companies now, be it a software company, a service provider or a manufacturing firm, decide what they are good at and outsource everything else, i.e., focus on their core competency, and let someone else do the rest in a more efficient and cost-effective manner. As a result, human resources outsourcing is becoming increasingly prevalent. The number of companies outsourcing HR activities continues to rise, and the scope of outsourced HR activities continues to expand. HR outsourcing can happen in HR functions, like payroll administration

(producing checks, handling taxes, dealing with sick-time and vacations), employee benefits (Health, Medical, Life insurance, Cafeteria, etc), human resource management (hiring and firing, background interviews, exit interviews and wage reviews), risk management, etc. Outsourcing has become a common response to manage people and technology resources strategically, enhance services, and manage costs more effectively. Outsourcing non-core activities allows HR professionals to move away from routine administration to a more strategic role. The organization can focus on higher value-added activities while the outsourcing provider takes care of the day-to-day administration. Critical internal resources, such as technology and talent, can be devoted to company's core business. Outsourcing reduces the need for large capital expenditures in non-core functions. Thus, outsourcing becomes a strategy for reducing the capital intensity of the business. This strategy has gained popularity as companies aim to grow, gain the speed and flexibility necessary to compete in today's business competition. A Large number of executives understand its cost benefits and it can bring also heightened strategic focus. Many recognize outsourcing relationships as long-term partnerships created to further the strategic goals of the organization. Out source companies possess the knowledge experts and resources to expertly perform part or all of a clients' human resources function, allowing the client to streamline their internal processes and concentrate on generating profit in their core business. But still in India, people are not very clear about what exactly is manpower outsourcing all about, and issues like quality and trust needs to be addressed properly. Experts say the basic reasons hampering the growth of HR outsourcing in India are confidentiality and cost factors. Moreover, the fear of losing jobs, losing control over confidential data, ethics and quality of outsourcing vendors, security breaches and overall confidence in the vendors determining many organizations. The biggest problem that is why the HR outsourcing industry in India is on the back foot - is the government and the industry's failure to tackle issues like data security and data privacy?. This is where Indian HR outsourcing companies face a major handicap. However, the future seems to be very promising. Estimates show that the latent size of HR outsourcing in ISndia is about $ 2 billion (please convert into Rs) with a current market of



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$ 27 million and it is growing at an alarming rate of about 50 per cent. India has immense potential as more than 80% of fortune 1,000 companies are discussing HR outsourcing as a way to cut costs and increase productivity. In view of above facts, an attempt has been made to study impact of out resourcing on performance of company. WHEN THE COMPANY WILL GO FOR OUTSOURCING – OR - INSOURCING OF MANPOWER:-

• Before deciding whether insourcing or outsourcing is the best option, it is important to first define business goals.

• Though insourcing may look like a straightforward option, businesses need to look closely to see how difficult it is to implement.

• Insourcing makes sense when the business requirement is only temporary or where no significant investment is involved. Insourcing is also an option for those who want to outsource but are wary to do so.

• Done well, insourcing may help you build a team of skilled people, though it might take more time than outsourcing.

• Insourcing can also help smaller businesses and startups that have little or no experience with outsourcing.

• Outsourcing is a clear winner when businesses need to cut costs while still requiring expert personnel.

• Today, companies of all sizes use outsourcing to let go of managing non-core functions while saving a lot of money in the process.

• Outsourcing also gives you access to specialized skill sets of resources and processes that insourcing simply cannot match—not without significant costs. This is perhaps one of the most important factors for businesses choosing to outsource.

• Though there are many outsourcing vendors, it is important to assess potential vendors before shaking hands on a partnership.

• Doing a little homework before choosing your outsourcing partner can lead to long term gains and help you build a long-term competitive advantage for your business.

2.1. OBJECTIVES OF THE RESEARCH:-

1) At what criteria their going to select the Manpower.

2) To know how the Outsourcing employee is Recruit in the place of existing employee position.

3) To know the situation in the organization regarding the Manpower.

4) To know the financial issues on the Insource and Outsource of Manpower.



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5) To know that when organization will go through for Outsourcing the employee.

6) To know the how must cost will be effected to the training.

7) To know the relationship of outsourcing employees in increasing of Productivity.

8) To know the team work between insource and outsource of Manpower.

9) To compare insource and outsource approaches in terms of their value adding capabilities in providing the components to the soft ware company.

10) To know the insource and outsource of employees additional working hours.

2.1.2. SCOPE/UTILITY OF THE RESEARCH:-

The research can be very useful to the HR professionals to understand the current trends in the market with regards to outsourcing of HR services. It will give them a comparison of the firms outsourcing HR services with those that have completely in-house HR functions. They will get to know about the perceived advantages and disadvantages of HR outsourcing and also the important considerations to be kept in mind. Outsourcing Vendors can also find this research useful in understanding the needs of their potential and existing clientele. The students can also benefit from this researches they will become aware of the new trends in the field of HR and will be better prepared for the challenges ahead of them when they join the industry as HR professionals. 2.1.3. NEED OF THE STUDY:-

• Man power requirements are to be estimated far beyond the actual requirements.

• Insource and Outsource plays a vital role in attracting people with multi- dimensional skills and experiences that suit the present and future organization strategies.

• Large corporations on every where are realizing the advantage of choosing an effective employee.

• Under this requirement, this study has been undertaken to understand the outsource and insource of manpower in the organization.

• Management is not only getting things done by others but also helping ordinary

people to produce extra ordinary results, productivity of men’s, capacity is more important than planned capacity.

• Effective relationship results in high employee productivity and job satisfaction.

2.2. REVIEW OF LITERATURE OF INSOURCE & OUTSOURCE:-

Outsourcing is promoted as one of the most powerful trends in modern management. The rationale for outsourcing some functions and/or processes includes substantial financial economies, increased ability to focus on strategic issues, access to technology and specialized expertise, and an ability to demand measurable and improved service levels.

This paper considers a range of core issues related to the establishment of outsourcing partnerships with the participation of companies from South Eastern Europe. Special emphasis is put on the incentives, benefits and risks associated with the realization of outsourcing partnerships with vendor companies from SEE transition countries. Strategic outsourcing as a main type of such a partnership helps firms to align their competitiveness priorities, to focus management attention on long-term growth and innovation opportunities, and to target resources to those tasks firms do best. Some evidence is suggested implying that international outsourcing generally has a positive impact on the organizational performance competitiveness enforcement in the companies within the region. Matilda Alexandrova (2013).

As Greer, Youngblood, and Gray (1999) observe, HR outsourcing decisions are frequently a response to an overwhelming demand for reduced costs for HR services. Downsizing and tougher competition mean that the HR functions is under increasing pressure to demonstrate value, both in terms of efficiency and effectiveness (Roberts, 2001). Although some elements of the HR functions may have always been performed by external service providers, Brewster observes that a new dimension “is this finance-driven idea connecting outsourcing to human resource management the idea that you can save a lot of money by outsourcing” (quoted in Turnbull, 2002, p.10). In addition, outsourcing is seen as a way of liberating HR professionals within the



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client organization to perform the more consultative and strategic role of designing and implementing programs aimed at retaining the workforce and enhancing its performance. This rationale is in line with Ulrich’s (1998) influential thesis of the four roles of HR, in which he proposed that HR should be a strategic partner, an administrative expert, an employee champion, and a change agent.

In a similar vein, Greer et al. (1999) argue that HR outsourcing is consistent with the business partner role that the in-house HR department is attempting to assume. These roles arguably are where HR can add the greatest value to the organization, but they are difficult to measure quantitatively. Outsourcing HR is also seen as an effective way to bypass organizational politics and improve efficiency. For example, according to the sales and training manager of United Kitchen, a company that has outsourced all personnel and training, the company’s aim was to buy an expert who could maintain an objective view, would not get embroiled in office politics, and yet could call on the support of a wide range of other experts in their own organization (Pickard, 1998). In short, the main reasons for outsourcing HR appear to be fairly consistent (Sisson & Storey, 2000). Typical reasons include seeking specialist services and expertise, cost reduction, and enabling HR specialists to take on a more strategic role. In general, most commentators are convinced that outsourcing is seen not only as a cost-cutting exercise but also as a strategic tool. As Oates (1998) suggests, the outsourcing decision is a strategic one and is generally taken at a senior level.

To the best of our knowledge, this research represents the first effort in IS/IT research to address and discuss outsourcing issues in the context of developing nations using a holistic approach. The research seeks to identify the factors that give rise to this phenomenon, and the degree to which they influence the practices, procedures, and outcomes of IS/IT outsourcing arrangements in Kuwait. The overall research aimed to provide a comprehensive pragmatic picture of IS/IT outsourcing practices, including motivations, risk analysis, contract drafting and legal issues, vendor selection criteria, evaluation practices, decision-making process, and post evaluation experience. There is growing evidence within the Kuwaiti environment to suggest that public

organizations are not achieving the desired benefits from their IS/IT outsourcing operations. IS/IT outsourcing projects in Kuwait are still undertaken in ways that are not clearly related to strategic change. It is clear that IS/IT outsourcing is a multi-faceted phenomenon that should be studied broadly in the context of developing countries as this study is the first of its kind. The lesson is that the solutions must make sense for the particular context in which they will be implemented considering all cultural and environmental factors. Furthermore, it was found that culture plays an important role throughout the outsourcing process. In this context, the failure of many IS/IT outsourcing projects in Kuwait were partially attributed to the lack of understanding of cultural\ ‘sensitive’ issues. The purpose of this paper is to determine the factors affecting the performance of outsourcing practice in the public sector in Kenya. The rapid growth of outsourcing has transformed the way public entities are managing their operations in providing services to the Kenyan citizen. This has brought considerable benefits as well as challenges. Outsourcing has been considered as one of the methods that public institutions utilize to strengthen their core competencies to ensure cost-effective management of resources. Outsourcing involves reviewing of functions and processes within an organization with a view of restructuring to enable an organization to focus on its key competencies. The paper concludes that realizing a competitive advantage from outsourcing requires a strategic orientation. This can be done through strategic analysis, rigorous vendor selection, contract negotiation and proper contract management, Pamela Getuno Nyaboke, Cyrus Saul Amemba and Anthony Osoro2013. This article provides a make-or-buy decision process methodology that any manager can implement whatever the size or industrial type of the organization. The make-or-buy methodology is one of the most critical strategic decisions within logistics outsourcing and should be taken in a structured and consistent manner. A practical guide to this decision is a step-by-step guide to addressing make-or-buy decision in a consistent and structured manner. The high-level steps are as follows:



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Evaluate whether outsourcing is right for your company;

Determine exactly what functions to outsource and the performance expectations;

Use a well-defined professional selection process to evaluate and select which provider(s) are right for the job. This paper insource & outsource

describes collaborative research commenced early in 1998 and being pursued in cooperation with the Queensland Government. It extends prior work by Hirschheim, R. & Lacity, M. (Beyond the Information Systems Outsourcing Bandwagon: The Insourcing Response, 1995; Information Systems Outsourcing: Myths, Metaphors and Realities, J. Wiley & Sons, Chichester, 1993) in the private sector, identifying Government specific contingencies, with emphasis on the outsourcing relationship and related contract structures. Comparison will be possible between the prior study and findings in the public sector. Preliminary findings will be available for presentation at ACIS’98. This paper studies economic determinants of IS outsourcing. It argues that a focus on comparative economic theories and models can improve our ability to explain outsourcing within the larger context of organizational strategy and environment. Specifically, the research constructs of production cost, transaction cost, and financial slack are examined simultaneously to understand what influences the Robert Zrnud was the accepting senior editor for this paper IS Outsourcing in Banks outsourcing decision. To empirically test these relationships, information was gathered from senior IT managers in 243 U.S. banks. Financial indices from the archives of the \ Federal Reserve Bank were a second important source of data.

A result of the study show that IS outsourcing in banks was strongly influenced by production cost advantages offered by vendors. Transaction costs played a role in the outsourcing decision, but they were much smaller than production costs. Finally, financial slack was not found to be a significant explanatory, although firm size was a significant control factor. The paper has important implications for research and practice. For researchers, the findings provide evidence that financial criteria can be key

factors in outsourcing decision and compare the relative effects of production and transaction costs. For practitioners, the findings suggest that managerial sourcing strategies need to weigh both costs when hiring systems integrators. This paper examines the decision to back source IT functions. Even though outsourcing is a popular means of meeting internal IT needs, press reports suggest that back sourcing is becoming increasingly common. When organizations implement a back sourcing strategy, they incur high rebuilding fees and expensive contract termination fees. Reverting back to the once abandoned strategy also reflects negatively on the organizations’ previous strategic decision and judgment. Still, many organizations choose to undertake the challenge of internalizing the once-outsourced functions. An interesting question, therefore, is what factors drive organizations towards back sourcing. Based on press reports of actual back sourcing cases, factors that lead to back sourcing decision were identified. Just as outsourcing decision, organizations choose back sourcing to capitalize on strategic opportunities. Organizations also back source due to internal power and politics interplay and the failure of outsourcing contract in meeting expectation. Changes in vendor organization and vendor strategy may also trigger back sourcing decision, Siew Fan Wong 2004. 3. RESEARCH METHODOLOGY:- Research is a scientific and systematic search for pertinent information on a specific topic. Research is an art of scientific investigation. “Research comprises defining and redefining problems, formulation hypothesizer suggested solutions, collecting, organizing and evaluating the data, making deductions and reaching conclusions and at last carefully testing the conclusions to determine whether they fit the formulating hypothesis” - By CLIFFORD WOOD Methodology means “a procedure designed to the extent to which it is planned and evaluated before conducting the inquiry and the extent to which the method for making decisions is evaluated” -By DHONDYAL. 3.1. STATEMENT OF THE PROBLEM:- The organization could be an avenue to achieve strategic corporate objectives without a



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doubt, through outsourcing & in sourcing approach is provided services offer better significant benefits, if chosen the right context. However, due to cost while making a choice, organization in fact, end up choosing outsourcing, though in-sourcing could have delivered better value in the long run, vice versa. This could result in a misalignment. However, Most organizations solely functions focus on short term cost minimization or use the subjective in decisions to the exclusions of other equally important variables and finds that results of short term financial analysis that usually support outsourcing rather than insource or not; while long term financial analysis provides the opposite. Due to the lack of effective decision making framework that for choosing though insource and outsource in achieving their needs of the organizations.

Two methodologies were adopted while undertaking the research: SECONDARY DATA COLLECTION:-

Large amount of secondary data is available in the forms of articles, journals, and previously conducted researches on the similar topics. This data was collected and studied to determine some of the broad trends prevalent in HR outsourcing across the world and the presence of HR outsourcing industry in India. Also, the data thus gathered helped in identifying key parameters to examine through further exploration and thus helped in defining the hypotheses for further study as well as designing the questionnaire. PRIMARY DATA COLLECTION:-

Primary data was collected through the means of a sample survey. For this purpose, a questionnaire was mailed to some of the HR managers and executives in various organizations and their response was solicited. The data collected through this survey was then analyzed to determine patterns and for testing the validity of the hypotheses formulated. Some survey techniques are used to collect the data by the framing of some questionnaires. MODES OF DATA COLLECTION:-

There are several ways of administering a survey. The choice between administration modes is influenced by several factors, including

• costs, • coverage of the target population, • flexibility of asking questions,

• respondents' willingness to participate and

• Response accuracy. 3.2. METHODOLOGY:- The various methods and techniques used in this project work are presented to achieve designated objectives

1) At what criteria their going to select the Manpower. This data is collected by the survey of 30 respondents in each organization.

2) To know how the Outsourcing employee is Recruit in the place of existing employee position.

This information is gathered from the HR and finance managers and the sub-ordinates in the organization.

3) To know the situation in the organization regarding the Manpower.

The HR manager has given response that at the attrition time they go to select the manpower.

4) To know the financial issues of Insource and Outsource of Manpower.

By the using of statistical method i.e. Chi-Square test, this objective is achieved

The X may be defined as X = ∑ (Oi -Ei)2

---------------- Ei

Oi = Observed Frequency, Ei = Expected Frequency

5) To know that when organization will go

through for Outsourcing the employee. This data is collected by survey of Executives

6) To know the how must cost will be significant to the training.

The significance of training cost is to be calculated using the Chi- Square Test. The correlation coefficient between the Recruitment and Training & Development was calculated to know the significance of training cost.

The X may be defined as X = ∑ (Oi -Ei) 2

---------------- Ei

Oi = Observed Frequency, Ei = Expected Frequency



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7) To know the welfare benefits of

employees that is linked with profit activity.

This is calculated by the chi-square method of taking the welfare benefits that is linked with profit.

8) To know the insource and outsource of employees additional working hours.

On the base of employee working hours the organization will give the benefits for the insource but not for outsource.

9) To compare insource and outsource approaches in terms of their value adding capabilities in providing the components to the soft ware company.

This objective is achieved by a survey of 30 respondent’s responses and using of statistical method of Multi Attribute Analysis. Multi attribute analysis was used to calculate the Mean rating, Relative importance Index, Criteria Suitability Score. Overall Suitability Score is Calculated using following empirical formulae

MRj=

RIIi=

CSS=RIIi*MRi OSS=

1<OSS<5

4. DATA ANALYSIS & INTERPRETATION: -

4.1.1 AT WHAT CRITERIA THEIR GOING TO SELECT THE MANPOWER: -

The basic criteria for selecting manpower in Maha Cement Company are presented in following

table 4.1 and shown in figure 4.1

Table 4.1.1 criteria for selecting manpower at Maha cement company

ENTITY

NO. OF RESPONDENTS

PERCENTAGE

Qualification 5 16.67 Job knowledge 10 33.33

Need of job 15 50 Total 30 100

Fig. 4.1.1 criteria for selecting manpower at Maha cement company

INTERPRETATION:- In the Maha cement company, the need

of job and job knowledge are considered as basic criteria for selection of job because manpower with good knowledge are essential to improve productivity and also produce goods

with good quality with less cost. The job knowledge is also most important to work effectively in the organization; the qualification is preferable to the higher carder peoples in the Maha cement to solve practical problems. In this organization, if there is a immediate



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procurement of employees, then they go through outsource because if they go though insource it will take long time.

Note: - I can mention one sample calculation of insource and outsource of selected industries and remaining as usual same as above example

.

4.2 HOW THE OUTSOURCING EMPLOYEE IS RECRUITING IN THE PLACE OF

EXISTING EMPLOYEE POSITION:-

The basic criteria to recruit the outsource employee in the place of existing employee table 4.2 and shown in figure 4.2

ENTITY PERCENTAGE

software 30%

manufacturing 15%

service 2%

TOTAL 47%

Table 4.2 shows the recruit the outsource employee in the existing place

Graph 4.2 shows the recruit the outsource employee in the existing place INTERPRETATION:- If it is a non pouching agreement the employee can’t be recruiting in the insource employee place because their will done the agreement with the vendor that our employee will work for the certain time that up to completing the project. If the employee is good and well performed the principle vendor is terminate the employee from the work and after the time the same employee is retained in the organization at the place of insource existing employee. Mostly this agreement is strict and legally registered non pouching agreement in the software companies.

In the manufacturing industry they won’t be compulsory for non pouching

agreement because most of the outsource employees are unskilled and low carder employees. Note: - I can mention one sample calculation of insource and outsource of selected industries and remaining as usual same as above example.



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4.3. THE SITUATION IN THE ORGANIZATION REGARDING THE MANPOWER:-

ENTITY INSOURCE OUTSOURCE

software 3% 7%

manufacturing 6% 1%

service 30% 0%

Table 4.3 shows the regarding of manpower

Fig 4.3 shows the regarding of manpower

INTERPRETATION:- At the manufacturing industry the manpower is recruit on the base of the attrition in that there will go 3% for the insource and 7% for the outsource of the employees. In the software the percentage of attrition is 7% in that 6% is insource and the 1% is out source do the employees. The attrition is suddenly the employees are going away from the organization. In the service they will recruit the 30% of the employee’s insource only. Note: - I can mention one sample calculation of insource and outsource of selected industries and remaining as usual same as above example. 4.4 WHEN ORGANIZATION WILL GO THROUGH FOR OUTSOURCING THE EMPLOYEE:- In the manufacture sector they will go through for outsource due to some reasons

1) To have an control on process 2) To reduce IR issues that is trade unions

disputes 3) To focus on will core function

In the software sector they will go to select the outsource due to the reasons namely

1) To focus on core activity

2) To have an quality of output in the non core functions (networking, housekeeping etc,.).

3) Financial impact.

4.5. DO YOU OUTSOURCE ANY OF YOUR HR SERVICES? At the manufacturing industries yes we will outsource because of to avoid the industrial disputes, strikes, lockouts, bands and for the purpose of cost effectiveness and maintaining the industrial relations and for the quick work. At the BPOs' mostly they go for the insource only but in case of any situation then their go to take the outsource and that to maintain the industrial relations. At the software they will go outsource due to core function of the company and it’s a high cost than compare to the insource and the two accompanied the goal and task effectively and the it is used that to complete the project within the time. Because if they concentrate on the all task their can spoil that the core function of the organization and can’t reach the goal effectively. And the main reason is that to maintain the good disciplinary action, to avoid internal disputes and conflicts of the organization. If in case the work is not complete



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by the insource they immediately over go for the outsource at to accomplish the task effectively even though if it is a high cost also. While outsource the organization will do the vendor audit that whether it is suitable for the work or not. 4.6. THE FINANCIAL ISSUES ON THE INSOURCE AND OUTSOURCE OF MANPOWER: -

4.6.1. MAHA CEMENT INDUSTRY:- The significance outsource and insource in companies is assessed using Chi-square test The X may be defined as X = ∑ (Oi -Ei) 2

---------------- Ei

entity observed expected o-e (o-e)2 (o-e)2/e percent

insource 600 400 200 40000 100 1

outsource 200 400 -200 40000 100 1

sum 800 800 ᵡ2 2 Statistical Calculated value is 2,

Observed of X2 for 1 degree freedom at 5%level is 3.841. INTERPRETATION:- The observed value is less than the calculated value of Chi square, it indicates that the

insource and outsource are more suitable for Maha cement. Note: - I can mention one sample calculation of insource and outsource of selected industries and remaining as usual same as above example

4.7. TO KNOW THE HOW COST MUST WILL BE EFFECTED TO THE TRAINING: - AT MAHA CEMENT: -

Statistical Calculated value is 0.714,

Observed value of X2 for 3 degree freedom at 5%level is 7.81.

Internal Training Cost 100 918 91800

External Training Cost 250 918 229500

On The job Training Cost 200 918 183600

Induction & Orientation Cost 150 918 137700



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INTERPRETATION:- The table value is less than the calculated value of Chi-square, it indicates that investment on training on various costs for both insource and

outsource is significant for Maha cement company. Note: - I can mention one sample calculation of insource and outsource of selected industries and remaining as usual same as above example.

4.8. IDENTIFICATION OF CORRELATION BETWEEN RECRUITMENT &

SELECTION AND REVENUE OF VARIOUS COMPANIES: - ENTITY RECRUITMENT &

SELECTION COST

REVENUE Maha cement 734400 39217 3I InfoTech 1480000 50000

Aegis 5100000 45834 Dr. Reddy’s 17000000 87480 Satyam 11000000 33130 Virtusa 5490000 530000

R= -0.04036

INTERPRETATION:- As seen in the above table mentioned above, Dr. Reddy’s company is investing more amount on recruitment & selection as seen that the company revenue are also high whereas in the Satyam, the cost of recruitment & selection

is high but the revenue factor is low due to imbalance of investment in the company, and lack of effectiveness. Note: - I can mention one sample calculation of insource and outsource of selected industries and remaining as usual same as above example.

4.9. I CALCULATED THAT TO IDENTIFY THE CORRELATION BETWEEN

TRAINING & DEVELOPMENT AND PRODUCTIVE OF AN EMPLOYEE AT VARIOUS

COMPANIES:-

ENTITY T&D

PRODUCTION

Maha cement 642600 272332 3I InfoTech 4040000 150000

Aegis 2130000 15166 Dr. Reddy’s 6800000 5735 Satyam 6800000 10315 Virtusa 2268000 194666

R= -0.74054

entity observed expected o-e (o-e)2 (o-e)2/e percent

Internal Training Cost 100 175 -75 5625 32.14286 0.321428571

External Training Cost 250 175 75 5625 32.14286 0.321428571

On The job Training Cost 200 175 25 625 3.571429 0.035714286

Induction & Orientation Cost 150 175 -25 625 3.571429 0.035714286

sum 700 700 0.714285714



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INTERPRETATION:- The table shows that Maha cement is investing the cost on employee is high and output of the employees is equal compare to others companies. 4.9 THE RELATIONSHIP OF OUTSOURCING EMPLOYEES IN INCREASING OF PRODUCTIVITY: -

In case of out sourcing companies will have service level agreements with vendors/ contractors. This will have the deduction clauses like if in case the productivity is decreases as per the agreement the organization can claim the loss on the principle vendor. 4.10 THE TEAM WORK BETWEEN INSOURCE AND OUTSOURCE OF MANPOWER: - It has been observed that the middle level and top level employee will be on roles of the client organization. Top level and below positions few technically independent positions

will be outsource and relation between them is cordial.

Even in the case of outsource or third party staffing client will finally select the candidate. 4.11. THE INSOURCE AND OUTSOURCE OF EMPLOYEES ADDITIONAL WORKING HOURS.

Here the respondents is answered that in case of insource if employee is working for additional hours on 4 hours then that person can get the one day salary and the extra benefits and in the case of outsource employees the person is should be work for additional hours on the base of them work and it’s to compulsory to work more additional working hours but for this employees their no benefit of extra salary 4.12. MULTIPLE REGRESSION ANALYSIS OF ALL COMPANIES:- By this we can say that the how the one variable is dependent on the various independent variables and to identify that it is significant or not.

S.N

o

Ent

ity

Em

plo

yee

cost

Sal

ary

cost

Acq

uis

itio

n

T&

D

(X3)

Wel

fare

co

st(X

4

(x1)

2

y1X

1

(y1)

2

Y1X

2

(x3)

2

Y1X

4

(X4)

2

X1X

2

X3X

4

1

Mah

a ce

men

t 2 1.37

0.0734

0.06

0.043

1.90

2.75

4.00

0.15 0.13

0.09

0 0.10

0.0027

2

Dr.

Red

dy’

s

5 2.4 0.1488

0.40

0.308

5.76

12 25.00

0.74 2.02

1.54

0.09

0.36

0.12

3

Sat

yam

4.7 2 0.0186

0.21

0.0318

4.00

9.4 22.09

0.09 1.00

0.15

0 0.04

0.01

4

3I

Info

Tec

h

2.3 1.08

0.017

0.68

0.145

1.17

2.4 5.29

0.04 1.56

0.33

0.02

0.02

0.10

5

Vir

tusa

25..7

6 11 0.68

0.47 36 151

635.0

277.2

17.14

11.84

0.22

66 0.32



39

6

Aeg

is 1.8 0.9 0.54

9 0.22

1.0318

0.81

1.62

3.24

0.99 0.41

0.06

0 0.49

0.01

S

um

41 13.75

11.806

2.27

1.0298

49.63

179

694.6

279.21

22.26

14.01

0.34

67.01

0.56

Ave

rage

6.83

2.292

1.98 0.37

0.1716

0.82

0.299

115.7

0.2107

0.37

0.233

0.56

1.202

0.932

Calculation of Multiple regression analysis b0= 1.283 b1= -2.876 b2= -1.56 b3= -1.94 b4= -2.67 y=bo+b1*X1+b2*X2+b3*X3+b4*X4 INTERPRETATION:- In the multiple regression analysis I taken the employee cost is Y and various parameters is influence i.e., salary cost, acquisition cost,

training & development cost, welfare cost but in this parameter salary cost is mostly contribute to employee cost.

4.12. TO COMPARE INSOURCE AND OUTSOURCE APPROACHES IN TERMS OF

THEIR VALUE ADDING CAPABILITIES IN PROVIDING THE COMPONENTS TO THE

SOFT WARE COMPANY: -

4.12.1 SUITABILITY RATINGS FOR THE USE OF INSOURCING OR OUTSOURCING

APPROACHES FOR STRATEGIC MANAGEMENT: -

suitability ratings:5(VHS)= Very highly suitable;4(HS)= highly suitable;3(MS)= moderately

suitable;2(SS)= somewhat suitable;1(NS)= not at all suitable; SI=criterion suitability score

Overall suitability ratings: OSS>4.49=VHS, 3.50<OSS<4.49=HS, 2.5<OSS<3.4=MS, 1.51<OSS<2.49=SS, <1.51=NS

crite

ria

for

valu

e-

addi

ng s

trat

egic

m

anag

emen

t

suitability ratings

Use of outsourced use of insourced VHS

HS MS SS NS VHS

HS MS SS NS

5 4 3 2 1 5 4 3 2 1

% % % % % TR

MR RII CSS % % % % % TR

MR RII CSS

criteria for value- adding strategic management

13.3 6.7 13.3 40 26.7 30 12 0.156 1.878 36.7 20 10 20 13.3 30 8.4 0.101 0.853

ensure that a coherent view of property is fed into the strategy of the organization

40 20 16.7 10 13.3 30 7.9 0.109 0.812 26.7 20 16.7 23.3 13.3 30 9.2 0.110 1.017



40

provide economically and efficiently for the present and future needs of clients

46.7 20 10 10 13.3 30 7.4 0.097 0.723 23.3 16.7 20 23.3 13.3 30 9.2 0.110 1.017

offering strategic advice based on knowledge of clients business

53.3 26.7 13.3 6.7 0 30 5.8 0.075 0.435 23.3 26.7 10 16.7 23.3 30 9.7 0.116 1.118

planning and designing for continuous improvement of service quality

46.7 16.7 20 10 6.7 30 7.1 0.093 0.659 36.7 23.3 20 16.7 6.7 30 8.1 0.097 0.787

enhancing corporate values through formulating and communicating strategic facilities policy

56.7 10 13.3 13.3 6.7 30 6.8 0.088 0.599 40 20 13.3 16.7 10 30 7.9 0.094 0.744

identifying business needs and user requirements

43.3 23.3 16.7 13.3 3.3 30 7 0.091 0.639 30 36.7 20 0 13.3 30 7.7 0.092 0.703

enhancing the competitiveness of core business

60 26.7 0 13.3 0 30 5.6 0.072 0.402 60 26.7 0 13.3 0 30 5.6 0.066 0.369

other downsizing, consolidation of units acquisition or disposition of properties]

40 20 6.7 20 13.3 30 8.2 0.107 0.881 13.3 6.7 13.3 40 26.7 30 12 0.143 1.723

enhance manageability, flexibility, sustainability of new

26.7 26.7 13.3 20 13.3 30 8.9 0.115 1.030 53.03

26.7 13.3 6.7 0 30 5.8 0.069 0.399

76.7 8.061

83.56 8.73 8.735

Overall Suitability Score(OSS) £ 8.06

overall suitability score(OSS) £ 8.73

Overall suitability Rating (OSR) VHS Overall suitability Rating (OSR) VHS

INTERPRETATION:- The suitability of the use of outsourcing & insource service in providing strategic function was analyzed in the above table. on the base of the overall suitability score(OSS) and the overall suitability rating (OSR), in source approach has found to more suited to providing the strategic function than the use of outsourcing. This was evident from the OSS of 8.06 & 8.73 for outsource and insource

approach respectively. The OSS value for insource shows a rating of VHS in the comparison with the OSS value outsourcing option with a rating of VHS in providing this function. Note: - I can mention one sample calculation of insource and outsource of selected industries and remaining as usual same as above example.

SPEAR SONS CORRELATION STRATEGIC MANAGEMENT

MR RII CSS MR RII CSS

12 0.156522 1.878261 8.444444 0.101064 0.853428

7.888889 0.102899 0.811755 9.222222 0.110372 1.017878

7.444444 0.097101 0.722866 9.222222 0.110372 1.017878



41

5.777778 0.075362 0.435427 9.666667 0.115691 1.118351

7.111111 0.092754 0.659581 8.111111 0.097074 0.787382

6.777778 0.088406 0.599195 7.888889 0.094415 0.744829

7 0.091304 0.63913 7.666667 0.091755 0.703457

5.555556 0.072464 0.402576 5.555556 0.066489 0.369385

8.222222 0.107246 0.881804 12 0.143617 1.723404

8.888889 0.115942 1.030596 5.777778 0.069149 0.399527

number of objects ranked n =10 Spearman's rank correlation coefficient, R =0.071518 t-score = 0.70863 degree of freedom, df = n-2 = 8

t-critical at 5% level of significant = 1.8650

accepted region = t<1.860

criteria for value- adding property development/project management

suitability ratings

Use of outsourced use of insourced

VHS HS MS SS NS VHS HS MS SS NS

5 4 3 2 1 5 4 3 2 1

% % % % % TR MR RII CSS % % % % % TR MR RII CSS

provide efficient and effective project management in order to ensure operational requirement are met with in specified budget and schedule

33.3 66.7 30 5.6 0.208 1.157 40 36.7 23.3

30 6.1 0.098 0.604

monitor and control the integrative planning and implementation to ensure performance satisfaction

26.7 40 23.3 10 30 3.6 0.133 0.474 36.7 13.3 23.3

26.7

30 8.9 0.143 1.278

scpoe management 26.7 40 33.3 30 3.6 0.133 0.474 36.7 20 13.3 23.3 6.7 30 8.1 0.131 1.064

compliance with quality or specifications

36.7 33.3 30 30 3.4 0.129 0.444 26.7 30 13.3 16.7 13.3

30 8.7 0.140 1.215

appropriate balance of time, quality, cost

50 33.3 16.7 30 3.9 0.145 0.567 23.3 16.7 26.7 23.3 10 30 9.3 0.151 1.410

comnsideratyion of operation and maintenance information

46.7 30 23.3 30 3.6 0.133 0.474 0 26.7 233 40 10 30 11.1 0.179 1.998

quality of project close off including asset records, maintenance information and warranties

46.7 23.3 30 30 3.1 0.117 0.362 20 13.3 36.7 20 10 30 9.6 0.154 1.478

26.7 3.95 61.8 9.050

Overall Suitability Score(OSS) £ 3.95 overall suitability score(OSS) £ 9.050

Overall suitability Rating (OSR) VHS Overall suitability Rating (OSR) HS



42

INTERPRETATION:- Result of the Spearman’s rank correlation test shows that no significant correlation exists between for the both sets of rank ordered mean rating values and criterion suitability score computed from insource and outsource rating for strategic management, that there is divergence in views of both set of values is therefore empirically supported at 5% level of insignicant. 4.12.2 SUITABILITY RATINGS FOR THE USE OF INSOURCING OR OUTSOURCING APPROACHES FOR PROJECT MANAGEMENT: - suitability ratings:5(VHS)= Very highly suitable;4(HS)= highly suitable;3(MS)= moderately suitable;2(SS)= somewhat suitable;1(NS)= not at all suitable; SI=criterion suitability score.

Overall suitability ratings: OSS>4.49=VHS, 3.50<OSS<4.49=HS, 2.5<OSS<3.4=MS, 1.51<OSS<2.49=SS, <1.51=NS INTERPRETATION:- The suitability of the use of outsourcing & insource service in providing project management function was analyzed. From result of the overall suitability score (OSS) and the overall suitability rating (OSR), in source approach has found to more suit to providing the project function than the use of outsourcing. This was evident from the OSS of 3.95 & 9.050 for outsource and insource approach respectively. The OSS value for insource shows a rating of VHS in the comparison with the OSS value outsourcing option with a rating of HS in providing this function.

SPEAR SONS CORRELATION PROJECT MANAGEMENT


5.555556 0.208333 1.157407 6.111111 0.098921 0.604516

3.555556 0.133333 0.474074 8.888889 0.143885 1.278977

3.555556 0.133333 0.474074 8.111111 0.131295 1.064948

3.444444 0.129167 0.444907 8.666667 0.140288 1.215827

3.888889 0.145833 0.56713 9.333333 0.151079 1.410072

3.555556 0.133333 0.474074 11.11111 0.179856 1.998401

3.111111 0.116667 0.362963 9.555556 0.154676 1.478018

number of objects ranked n =07

Spearman's rank correlation coefficient, R =-0.70115

t-score = 0.02384

degree of freedom, df = n-2 = 5



INTERPRETATION:- Result of the Spearman’s rank correlation test shows that significant correlation exists between for the both sets of rank ordered mean rating values and criterion suitability score computed from insource and outsource rating

for project management, that heir is divergence in views of both set of values is therefore empirically supported at 5% level of significance



43

4.12.3 SUITABILITY RATINGS FOR THE USE OF INSOURCING OR OUTSOURCING APPROACHES FOR OPERATIONAL MANAGEMENT: - suitability ratings:5(VHS)= Very highly suitable;4(HS)= highly suitable;3(MS)=

moderately suitable;2(SS)= somewhat suitable;1(NS)= not at all suitable; SI=criterion suitability score. Overall suitability ratings: OSS>4.49=VHS, 3.50<OSS<4.49=HS, 2.5<OSS<3.4=MS, 1.51<OSS<2.49=SS, <1.51=NS

criteria for value- adding operatinal management

suitability ratings


VHS HS MS SS NS VHS HS MS SS NS

5 4 3 2 1 5 4 3 2 1

% % % % % TR MR RII CSS % % % % % TR MR RII CSS

provide excellent, safe, secure and healthy working environment 50 33.3 16.7 0 0 30

5.6 0.064 0.359 36.7 16.7 13.3 26.7 6.7 30

8.3 0.088 0.738

establish budgets to achieve best value over the longer term 40 33.3 26.7 0 0 30

6.2 0.072 0.450 33.3 20 13.3 23.3 10 30

8.6 0.091 0.778

maintain the operational fitness and value of the state by timely and adequate maintenance and reduction of facility deterioration and obsolescence 40 33.3 26.7 0 0 30

6.2

0.072 0.450 26.7 23.3 20 13.3 16.7 30

9

0.095 0.861

minimize equipment and structuralfailures 36.7 26.7 33.3 0 0 30

6.3 0.073 0.467 23.3 23.3 16.7 20 16.7 30

9.4 0.100 0.948

meet the standard needs and quality of the performance 46.7 20 16.7 0 16.7 30

7.3 0.085 0.626 40 20 23.3 10 6.7 30

7.4 0.079 0.589

offer service quality in support of business operations

23.3

40

0

0

36.7

30

9.6

0.111 .063

30

36.7

13.3

0

20

30

8.1

0.086 0.699

improve facilities to enhance operational eefficiencies 40 26.7 20 0 13.3 30

7.3 0.085 0.626 26.7 43.3 30 0 0 30

6.8 0.072 0.488

organize an effctual organizational structure that plans, schedules and measures work activity and productivity 36.7 30 13.3 0 20 30

7.9

0.091 0.724 36.7 26.7 20 16.7 0 30

7.2

0.076 0.554

maximize trade staff productivity 40 26.7 20 0 13.3 30 7.3 0.085 0.626 53.3 13.3 23.3 0 10 30 6.7 0.070 0.472

establish productive workplace and low operating and maintenance costs 30 20 16.7 0 16.7 30

6.8

0.078 0.534 40 20 23.3 10 6.7 30

7.4

0.079 0.589

identify and clearly define all requried services including interfaces 20 40 23.3 0 16.7 30

8.4

0.098 0.830 56.7 6.7 20 16.7 0 30

6.6

0.069 0.457

ensuring effective purchasing and contracting strategies 40 26.7 26.7 0 6.7 30

6.9 0.080 0.552 36.7 13.3 16.7 26.7 6.7 30

8.4 0.089 0.758

85.9 1 7.311 94 1 7.939

Overall Suitability Score(OSS) £ 7.311 overall suitability score(OSS) £ 7.939

Overall suitability Rating (OSR) VHS Overall suitability Rating (OSR) VHS

INTERPRETATION:- The suitability of the use of outsourcing & insource service in providing operational managent function was analyzed in the above table from this result of the overall suitability score(OSS) and the overall suitability rating (OSR), in source approach has found to more suited to providing the operational function than

the use of outsourcing. This was evident from the OSS of 7.311 & 7.939 for outsource and insource approach respectively. The OSS value for insource shows a rating of VHS in the comparison with the OSS value outsourcing option with a rating of HS in providing this function.



44

n =12

Spearman's rank correlation coefficient, R =-0.46409 t-score = 0.56173

degree of freedom, df = n-2 = 10 t-critical at 5% level of significant = 1.8650


INTERPRETATION:- Result of the Spearsman’s rank correlation test shows that significant correlation exists between for the both sets of rank ordered mean rating values and criterion suitability score computed from insource and outsource rating for operational management, that heir is divergence in views of both set of values is therefore empirically supported at 5% level of significance.

4.12.4. SUITABILITY RATINGS FOR THE USE OF INSOURCING OR OUTSOURCING APPROACHES FOR SERVICE MANAGEMENT: - suitability ratings:5(VHS)= Very highly suitable;4(HS)= highly suitable;3(MS)= moderately suitable;2(SS)= somewhat suitable;1(NS)= not at all suitable; SI=criterion suitability score Overall suitability ratings: OSS>4.49=VHS, 3.50<OSS<4.49=HS, 2.5<OSS<3.4=MS, 1.51<OSS<2.49=SS, <1.51=NS

criteria for value- adding service management

suitability ratings


VHS

HS MS SS

NS VHS

HS MS SS NS

5 4 3 2 1 5 4 3 2 1

% % % % % TR

MR

RII CSS % % % % % TR

MR

RII CSS

quality of service 53.3 23.3 16.7 0 6.7 30 6.1 0.133 0.813 40 36.7 23.3 0 0 30 6.1 0.098 0.604 cost of efficiency 60 16.7 23.3 0 0 30 5.4 0.118 0.645 36.7 13.3 23.3 0 26.7 30 8.9 0.143 1.278 speed of service including emergency response 40 26.7 23.3 10 0 30

6.8 0.147 1.001 36.7 20 13.3 23.3 6.7 30 8.1 0.131 1.064


5.555556 0.064683 0.35935 8.333333 0.088652 0.738771 6.222222 0.072445 0.450769 8.555556 0.091017 0.778697

6.222222 0.072445 0.450769 9 0.095745 0.861702 6.333333 0.073739 0.467012 9.444444 0.100473 0.94891 7.333333 0.085382 0.626132 7.444444 0.079196 0.589572 9.555556 0.111255 1.063102 8.111111 0.086288 0.699895 7.333333 0.085382 0.626132 6.777778 0.072104 0.488705 7.888889 0.09185 0.724594 7.222222 0.076832 0.554899 7.333333 0.085382 0.626132 6.666667 0.070922 0.472813 6.777778 0.078913 0.534857 7.444444 0.079196 0.589572 8.444444 0.098318 0.830243 6.555556 0.06974 0.457184 6.888889 0.080207 0.552537 8.444444 0.089835 0.758603



45

provide effective space management with in existing parameters and fore caste efficient utilization 33.3 43.3 16.7 0 6.7 30

6.8 0.147 1.001 26.7 30 13.3 16.7 13.3 30 8.7 0.140 1.215

offer border experience and best practice 43.3 23.3 20 0 13.3 30

7.2 0.157 1.136 23.3 16.7 26.7 23.3 10 30 9.3 0.151 1.410

provide support services in overall facilities management 56.7 16.7 26.7 0 0 30

5.7 0.123 0.699 0 26.7 23.3 40 10 30 11.1

0.179 1.998

improve corporate Image 40 26.7 6.7 10 16.7 30 7.9 0.172 1.356 20 13.3 36.7 20 10 30 9.6 0.15 1.478

45.9

6.654 61.8

9.050

Overall Suitability Score(OSS) £ 6.65

overall suitability score(OSS) £ 9.050

Overall suitability Rating (OSR) VHS

Overall suitability Rating (OSR) VHS

INTERPRETATION:- The suitability of the use of outsourcing & insource service in providing service managent function was analyzed in the above table from this result of the overall suitability score(OSS) and the overall suitability rating (OSR), in source approach has found to more suited to providing the service function than the

use of outsourcing. This was evident from the OSS of 6.65 & 9.050 for outsource and insource approach respectively. The OSS value for insource shows a rating of VHS in the comparison with the OSS value outsourcing option with a rating of HS in providing this function.


6.111111 0.133172 0.813828 6.111111 0.098921 0.604516

5.444444 0.118644 0.645951 8.888889 0.143885 1.278977

6.777778 0.1477 1.001076 8.111111 0.131295 1.064948

6.777778 0.1477 1.001076 8.666667 0.140288 1.215827

7.222222 0.157385 1.136669 9.333333 0.151079 1.410072

5.666667 0.123487 0.699758 11.11111 0.179856 1.998401

7.888889 0.171913 1.356201 9.555556 0.154676 1.478018



46

INTERPRETATION:- Result of the Spearsman’s rank correlation test shows that significant correlation exists between for the both sets of rank ordered mean rating values and criterion suitability score computed from insource and outsource rating for service management, that heir is divergence in views of both set of values is therefore empirically supported at 5% level of significance.

5. FINDINGS: - 1) In 3I InfoTech company, the cost

incurred for insource & outsource is imbalanced since company is investing the huge amount on insource than of outsource because they may be for the security purpose means like to avoid the liking advanced new technology information in the organization.

2) Mahindra Satyam Company is a software company; its focuses on software development through outsource in order to accomplish the designated objective within stipulated time at affordable cost.

3) The observed value is greater than the calculated value at Virtusa Consultant. Because it is a BPO company its focuses on to supply the employees to different organization only to ensure that they go to outsource that to accomplish the objective.

4) Satyam Company is spending significant amount on the training & development. However company invested on the employee by giving of training is not significant in improve employee performance and company growth.

5) The observed value is greater than the calculated value of Chi square, it indicates that the insource and outsource are not suitable for Ageis Consultant.

Because it is a BPO company its focuses on to increase the employment and develop the updated technology with trained employees only to ensure the all they go to outsource that to accomplish the objective.

6) In the Dr. Reddy’s company, recruitment & selection cost is equal to the company revenue whereas in the satyam, the cost of recruitment & selection is high but the revenue factor is low due to imbalance of investment in the company.

7) The Spearman’s rank correlation test shows that no significant correlation exists between for the both sets of rank ordered mean rating values and criterion suitability score computed from insource and outsource rating for strategic management.

8) In out sourcing companies will have service level agreements with vendors/ contractors. This will have the deduction clauses like if in case the productivity is decreases as per the agreement the organization can claim the loss on the principle vendor.

9) If the employee is working for additional hours on 4 hours then that person can get the one day salary and the extra benefits and in the case of outsource employees, the person should be work for additional hours on the base of the work.

10) In the multiple regression analysis, salary cost parameter is mostly contributed/ influence on employee cost.

11) The Spearman’s rank correlation test shows that significant correlation exists between for the both sets of rank ordered mean rating values and criterion suitability score computed from insource

number of objects ranked n =7

Spearman's rank correlation coefficient, R =0.00456

t-score = 0.11506

degree of freedom, df = n-2 = 5





47

and outsource rating for service management.

12) Based on multi attribute analysis by using of mean rating, relative importance index, criterion suitability score and over all suitability score, suitable for organization either insource or outsource can be predicted on the base of functional areas like strategic function, project function, operational function & service function.

6. REFERENCES: - Barney, J. (1991), Firm resources and

sustained competitive advantage. Journal of Management, 17 (1): 99–120.

Bester, M. (2000), Outsourcing logisticne dejavnosti: Nujnost, izziv ali bodoca izkusnja. Maribor. Ekonomsko – poslovna fakulteta.

Bongard, Stefan (1994), Outsourcing - Entscheidungen in der Informationsverarbeitung. Entwicklung eines computergestützten Portfolio- Instrumentariums. Wiesbaden. Deutscher Universität Verlag, str. 480.

Corbett, Michael F. (2004), The Outsourcing Revolution: Why It Makes Sense and How to Do It Right. Kaplan Business, Washington.

Helfer, Doris Small. " Insourced or Outsourced: A Tale of 1\vo Libraries," Searcher: The Magazine Jor Database Prqfessionals, September 1997, pages 68-70.

Hayes, R, Pisano, G & Upton, D 1996, Strategic Operation Competing Through Capabilities, The Free Press, New York.

Healey, J 1993, Statistics – a tool for

social research, 3rd

edition, Wadsworth, Inc., California.

Heikkila, J & Cordon, C 2002, ‘Outsourcing: a core or non-core strategic management decision?’ Strategic Change, vol. 11, no. 4, pp. 183–193.

Probert, D.R.; "The Practical Development of a Make or Buy Strategy: the Issue of Process Positioning". Integrated Manufacturing Systems, 7(2), 1996, pp. 44-51.

McIvor, R.T., Humphreys, P.K., McAleer, W.E.; "A Strategic Model for

the Formulation of an Effective Make or Buy Decision". Management Decision, 35, 1997, pp. 169-178.

Whitaker J., Krishnan M.S., Fornell C. 2008. Business insight: How to offshore outsourcing affects customer satisfaction. Wall street journal, Jul 7, pg R.4.

Perkins B. 2004. Outsourcing: First ask why. Computerworld, No. 8.

Porter A. M. 2000. The virtual corporation: Where is it? Purchasing, Mar 23, Vol. 128, No. 4, pp.40-48.

Chalos, Peter (Winter 1995) Costing, Control, and Strategic Analysis in Outsourcing Decisions. Journal of Cost Management, pp. 31-37.

Dartina, Ralphe (March 1994) The Outsourcing Decision. Management Accounting, pp. 56- 62.

Fagan, Mark L. (March/April 1991) A Guide to Global Sourcing. The Journal of Business Strategy, pp. 21-25.

Ford, D., Cotton, B., Farmer, D., Gross, A., Wilkinson, Ian (1993) Make-or-Buy Decisions and their Implications. Industrial Marketing Management, 22, pp. 207-214.\

Chalos, Peter (Winter 1995) Costing, Control, and Strategic Analysis in Outsourcing Decisions. Journal of Cost Management, pp. 31-37.

Dartina, Ralphe (March 1994) The Outsourcing Decision. Management Accounting, pp. 56- 62.

Fagan, Mark L. (March/April 1991) A Guide to Global Sourcing. The Journal of Business Strategy, pp. 21-25.

Ford, D., Cotton, B., Farmer, D., Gross, A., Wilkinson, Ian (1993) Make-or-Buy Decisions and their Implications. Industrial Marketing Management, 22, pp. 207-214.

Pollitt, C. and Bouckaert, G. (2000), Public Management Reform: A Comparative Analysis, Oxford University Press: New York.

Posner, R. (1997), Social norms and the law: an economics approach. American Economic Review 87, 365-369.

Prendergast, C. (1999), The provision of incentives in firms. Journal of Economic Literature 37(March), 7-63.



48

Hammer, M. and Champy, J. Reengineering the Corporation – ‘A manifesto for Business Revolution’, Nicholas Breasley. (1992)

Oates, D. “Outsourcing And Virtual Organisation – The incredible Shrinking Company”,Century Business: London. (1998)

[Sanders, J. “Outsourcing in Action”, The Institute of Chartered Accountants in England and Wales, Chartech Books. (1999)

Greaver, M. F. II “Strategic Outsourcing – A structured approach to outsourcing decisions and initiatives”, Amacom. (1999)

Armstrong, C.P., and Sambamurthy, V. "Information Technology Assimilation in Firms: The Influence of Senior Leadership and IT Infrastructures," Information Systems Research (10:4) 1999, pp. 304-327.

Bigley, G.A., and Wiersema, M. "New CEOs and Corporate Strategic Refocusing: How Experience as Heir Apparent Influences the Use of Power," Administrative Science Quarterly (47:4), Dec 2002, pp. 707-727.

Boeker, W. "Executive Migration and Strategic Change: The Effect of Top Manager Movement on Product-Market Entry," Administrative ScienceQuarterly (42:2) 1997, pp. 213-236.

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