The benefit and alignment of outsourcing services on organizational culture
Many companies benefit from outsourcing services because it allows the company to lower costs, focus on its organizational culture, and increase the speed and quality of services. You have been asked to analyze how the outsourced service interacts with your company’s clients.
Read and select 1 of the following scenarios to complete the assignment:
- In 2009, the U.S. Stimulus Act changed the way health care providers use electronic health records (EHR). A local clinic was informed that to avoid penalties it would need to adopt a qualified EHR system. The clinic managers discussed two options: 1) adopting an in house EHR system and 2) outsourcing the EHRs. After weighing the pros and cons of each option, the company decided to outsource the EHRs.
- Recent research shows that many companies are starting to explore the idea of outsourcing for their human resources department. A large pharmaceutical company has begun discussing outsourcing their human resources department.
- Atwood Laboratories is a small company that completes lab work and bills its patients using two staff members. A larger laboratory in the neighborhood closed its doors recently, which has increased Atwood’s patients and billing. The company is considering outsourcing its patient billing to accommodate the influx of patients.
Write a 700- to 1,050-word paper that includes the following:
- Identify the relationship of the outsourced service and the impact to the organizational structure.
- Describe the benefit and alignment of outsourcing services on organizational culture.
- Describe how a company can align the client experience with the outsourced service along with your organizational culture.
The benefit and alignment of outsourcing services on organizational culture
Benefits of Outsourcing Services
The premise of outsourcing service is increasing in many industries and is becoming a widespread practice in many organizations regardless of size. The benefits of outsourcing outweigh in many cases any negative impact. An organization, such as Atwood Laboratories, is a small company serving the community, but with immediate increased services and demand on the company, an innovated idea must be entertained. Atwood Laboratories must develop an idea that would increase patient satisfaction, decrease the demand of their work-force and meet the demand of the closing of the larger facility. The alternative is to outsource patient billing to a entity that can specialize in patient billing.
The Relationship of the Outsourced Service and Impact it has on the Organizational Structure.
Outsourcing of services for an organization can establish a collaborated relationship between the original company and the outsourcing vendor. This relationship normally has a dual focus, as it is built on the needs of the consumer and the community being served, in addition to the original organization’s needs. The impact of outsourcing can be multi-facet and can affect the original organization within areas such as supervision, coordination and task allocation. The immediate benefits can also affect cost and the outcome of service performance and expectations.
The Benefit and Alignment of Outsourcing Services on Organizational Culture.
The benefits for outsourcing for companies has many advantages, but for small companies, the gain is the cost-efficient manner to stay competitive within their industry with larger organizations. Attwood Laboratories, as a small company would add benefit and value from outsourcing in areas such as increase efficiency, reduced on labor cost and staff training, control of capital cost and a reduction in risk. The major focus of their service would be patient care through laboratory services and the additional services, such as patient billing would be handled by a larger organization with additional staff and resources. Patient satisfaction from a revenue management standpoint would increase and the need for additional internal staff and training would decrease. Other major visible benefits would be supported through the following:
- Cost Advantages
- The savings in employee wages and benefits in accordance to the location of the outsourcing company versus the original smaller company. Larger companies can obtain discounted rates for insurance benefits for a larger employee community versus a smaller employer.
- Outsourcing to larger companies can allow a broad experienced staff to immediately handle a variety of situations without costly and timely training programs, needed by smaller companies. In many scenarios, technology and infrastructure can accompany the increased efficiency with the unique environment.
- Focus on Service
- Outsourcing allows for the original company to focus on their brand or their service and emphasize on customer service and product line. As with Attwood Laboratories, the focus with their internal infrastructure can be based on service and patient care.
Outsourcing equally can have disadvantages especially within the healthcare industry, as to the privacy violations and possible exposure. Strict business associate agreements must be compliance with all governmental privacy laws, as Attwood Laboratories would be outsourcing patient demographic and insurance information.
In addition, any company in search of outsourcing services to a outside vendor, must use caution and diligence in company research and selection. Outsourcing to outside companies may also lead to the potential of losing customers, data or finances; as services may not be handled properly, leaving the original company at a loss of revenue.
To prevent loss and ensure maximum benefits from outsourcing, companies such as Attwood Laboratories must confirm that all parties are (both the outside vendor and the original company) have the same service focus, mission and vision. When aligning an outsourcing vendor with the original company, it’s imperative that the organizational structure, behavior and values are almost equal. These values will hopefully ensure equal approach to customer service and work ethics. The focus of customer service not only in actual hands on patient care through laboratory service, but also through patient billing must not be lost with the outsourcing initiative.
Outsourcing does support many advantages for a small company with increased growth, reduced cost and focused service. The outsourcing initiative for a company such as Attwood Laboratories would support changes to their organizational structure and behavior. This endeavor can and will bring focused change to the company, the patients they service and the services they perform.
AllBusiness.com (2008). The Benefits of Outsourcing for Small Businesses, The New York Times. Retrieved from https://nytimes.com/allbusiness/AB5221523_primary.html
Arnold, G; Businessmarketingengine.com () 3 Benefits of Outsourcing for Small Businesses. Retrieved from https://businessmarketingengine.com/3-benefits-of-outsourcing-for-small-businesses/
Flatworld Solutions. (2016) Retrieved from https//www.flatworldsolutions.com/articles/advantages-disadvantages-outsourcing.php
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