Evaluation of the client efficiency outsourcing activities by major types of outsourcing

Authors: 
Partyn G.O., Didukh O.V.

In the process of improvement of industrial and business activities of enterprises in
accordance with changes of competitive market environment the question of efficiency assessment
of outsourcing transactions which secure solid economic benefits and simultaneously generate line
of risks is very important. Despite the abundance of literature which examines the features of
evaluating the effectiveness of outsourcing, one of the outstanding issues today is the issue of
determining the effectiveness of outsourcing activity in general which may include interaction with
several outsourcers under the transfer to themof certain functions . That is why the purpose of the
article is to develop the conceptual approaches and system of indicators which determine the
effectiveness of outsourcing activity of the client for certain types of outsourcing, taking into
account the characteristics of their impact on the financial and economic performance of the
enterprise on the market. Therefore in the article, the main task of the previous, current and
complete analysis of the efficiency of outsourcing activity is defined as well as three conceptual
approaches to determining the results of cooperation of the client and outsourcer were isolated.
One of them is based on determining the cost-effectiveness of outsourcing activity, which
characterizes the amount of cost savings of the client in the case when the function was transferred
to the outsourcer. This approach would be used when the goal of outsourcing is to reduce costs and
the income of the enterprise will be the same after outsourcing. In the process of outsourcing
implantation the cost level of the enterprise may not decrease but financial results of its activity
will be improved through profit increase as a result of improve product quality, of length
reduction of operational circle and usage of released part of assets. Therefore, the second approach is based on a comparison of the growth rate of profits, revenues and expenses. As to the third
approach, the evaluation of the effectiveness of outsourcing activity can be carried out using the
system of indicators as for certain types of outsourcing as well as general indicators. In the
previous, current or final evaluation of the effectiveness of outsourcing activity, it is possible to use
each of these approaches, but with different levels of accuracy.