Question

Perform an Internet search to identify at least two companies in different industries that have entered into outsourcing agreements with firms with specialized services. In addition, describe what value chain activities the companies have chosen to outsource. Do any of these outsourcing agreements seem likely to threaten any of the companies' competitive capabilities?

Answer 1

We can select the companies IBM and Grupo Gigante. Grupo Gigante is considered to be the most successful organization of Mexico. The business contractor both the organization has been extended by further five years with the help of a number of outsourcing contracts. The main responsibility of IBM is o monitor and takes care of the information system and IT infrastructure with the help of two managed service setups which is infrastructure and application used in the organization. The outsourcing solution of IBM provided to Grupo Gigante mainly includes the maintenance of IT infrastructure, different types of service components for server hosting, distributed computing services, helpdesk management, security of data center, on-site support services and disaster management. Apart from this, there will be a team of experts hired by Grupo Gigante so that it can have the access and management of important and vital IT applications which are critical to its business and this will facilitate Grupo Gigante to have the internal human capital which will be developed in a given period of time. This will enable Grupo Gigante to come up with the testing of new applications and provide a strategic business decision, improved efficiency in managing daily affairs. The value chain which is being involved here will be seen as support activity.

The second example can be seen as the agreement between NCR Corporation and Co-op Financial Services which is of three years for the management of ATM. Under this agreement, and Co-op Financial Services will have the advantage of having the leased ATM machines rather than buying them at a higher price. This will help the firm to control its expenses. This can be seen as a more attractive option for most of the financial organization as it will not require capital investment. The management of leased ATMs will be done by Co-op ATM Managed Services. The first and second line maintenance will be ensured by NCR and thus in case of any break down of ATM, it will be the responsibility of NCR to maintain them. There is no clear threat to the competitiveness of these organizations from this agreement.