W3-ALi hubais-outsourcing of project activities


  1. Problem Definition.

Now a day most of the company looking to outsources most of its project activity and concentrating on its core business activity so our company is studying to sale all company car and to outsource rent car from outside .so we have to consider the positive point and negative point of outsourcing car by using the outsourcing decision matrix .

OutsourcingMatrix

Figure No. 1

  1. Identify the Feasible Alternative.

Refer to Figure 1 above the outsourcing decision matrix, helps the project manager to consider two important factors in outsourcing a task as well they have to consider the cost factor, safety social factor & Operability.

  1. The strategically importance of the task in project. Where the Strategically important tasks are sources of competitive advantage.
  2. The task’s impact on the project operational performance. Where the tasks which have a high impact on operational performance are those which, if done well, contribute greatly to the smooth running of the organization or, if done badly, greatly disrupt it.
  1. Development of the Outcome for Alternative

 

To analysis the quality of comparing outsourcing and in-house option of any activity in project as per Operational performance and strategic importance. So alternatives and correspondent attributes are below

Parameter Outsourced In- Housed
Cost – Fix amount in monthly bases without any break dawn cost. – Over head cost. – Repairing Cos, Insurance Cost and Operation cost.
Social Impact -Developing SME By awarding Contract to them -don’t support local Comity in terms of business impact
Safety -SME are looking for cheaper product which accrue health incident if there is no stander Requirment -safety are take in to account and stander product are inspected every time
operability Risk -if the car break dawn the replacement are available to expedite the process -The availability of company car it may be better for knowing the exact status but replacement are not available

Table no 1

The following are the weight estimate of each attribute relative to the option below in table 2

Parameter Outsourced In- Housed
Cost  1 4
Social Impact  5 3
Safety  3 4
operability Risk  5 1
Note: Score (1-5), so 1 is most difficult, risky & Expensive where 5 least difficult, risky & Expensive

Table2:

The calculation of Dimensionless value is show below in table no 3 as per the alternative & attributes relative weight from table no 2.

Parameter Outsourced In- Housed
Cost Value 1 4
Dimensionless Value 1 0
Social Impact Value 5 3
Dimensionless Value 2 0
Safety Value 3 4
Dimensionless Value 1 1
operability Risk Value 5 1
Dimensionless Value 0 1
Note: Score (1-5), so 1 is most difficult, risky & Expensive where 5 least difficult, risky & Expensive

Table No 3

–          The below table shows the weight of attribute

Attribute Ranking Weight
Cost 1.0 0.1
Social Impact 3.0 0.3
Safety 5.0 0.5
operability Risk 1.0 0.1
Total 10.0 0.1

Table No. 4

4. Selection of the Acceptable Criteria.

Refer to the above tables the highest dimensionless value is the selection criteria.

5. Analysis and Comparison of the Alternative.

Attribute Weight Outsourcing In-house
Dim Value Weigh Value Dim Value Weigh Value
Cost 0.1 0.1 0.1 0 0.4
Social Impact 0.3 0.2 0.5 0 0.3
Safety 0.5 0.3 0.1 0.1 0.4
operability Risk 0.1 0 0.5 0.1 0.1
Total 1.0 1.2 1.2

Table No .5

Refer to above table no 5 it shows the comparison and analysis between outsourcing and in-house car in the company.

6. Selection of the Preferred Alternative.

Both option are showing the same result in the analysis so better for the company to avoid the risk of any car damage and better to manage on activity not spare part and other maintenance activity in same time.

7. Performance Monitoring and the Post Evaluation of Result.

The result of above analysis it helps in outsourcing other project in the company where it reduce man hour cost of the staffing.

8. References:

  1. The outsourcing decision matrix retrieved on 20 June 2014 from http://www.mindtools.com/pages/article/newSTR_45.htm
  1. Tools for Multi-Attribute Decision Making, Retrieved on 20 June, 2014, from http://www.students.iitmandi.ac.in/~deepak_sharma/maked/tutorial.html
  1. A Simple Way To Use Core Competency and Financial Impact Analysis in Outsourcing  retrieved on 21 June 2014 from Planninghttp://www.sourcingmag.com/content/c060830a.asp
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One thought on “W3-ALi hubais-outsourcing of project activities

  1. EXCELLENT case study Ali, you followed our step by step process very well and your citations were spot on.

    Whenever you have a tie, then the recommended approach would be to keep adding more attributes to analyze until you can get some differentiation.

    Keep up the good work and look forward to seeing more good postings like this…

    BR,
    Dr. PDG, Boston

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