Project Management Essay Example | Topics and Well Written Essays - 1250 words - 8

Project Management - Essay Example Literature has suggested a number of benefits which can be achieved by outsourcing the payroll system. Majorly, it is considered to outsource in order to achieve the cost reduction benefits, where the exceptional contractor’s performance and its low-cost structure can reduce the cost directly, as well as it converted the fixed cost into the variable costs and also by lowering the in-house staff (Seth & Sethi, 2011). Other indirect benefits resulting in the cost reductions are increasing efficiency by more focus on main business operations, employee retention with specialized programs designed strategically by vendor, bettered the risk management, and also minimizing the firm’s politics (Turnbull, 2002; Rubery, Cooke, Marchington, & Earnshaw, 2003). The outsourcing Payroll system has some other benefits resulting in revenue enhancements. The direct revenue enhancement occurs through more cash generation and savings, which is achieved by transferring the assets needed to manage payroll towards the vendor, so it lowers the investment and make the resources available for further purposes (Seth & Sethi, 2011). While it also increases the revenues indirectly by improving customer services and satisfaction resulting in increased sales, gaining more contacts through vendor PR, speeding up, expansion, legal compliance and also by accessing the advanced technology through vendors’ specialized services (Adler, 2003). On the other hand, there is little evidence found in literature to realize these benefits. As (Dickmann & Tyson, 2005) has argued that there are more costs incurred while outsourcing the payroll system due to more transaction costs. Additionally, according to (Mellewigt, Madhok, & Weibel, 2007), there is an ethical is sue of payroll outsourcing, which is the critical employee’ information security breaches. Moreover, the lower control over HR functions,