Outsourcing Reuters

Outsourcing of back-Office operations as a way to improve profit at Thomson Reuters The international business environment has evolved to be increasingly complex and highly competitive. As a result many organizations have been forced to streamline operations and to look for new sources of innovation in efficiency. Many organizations have turned to outsourcing to reduce costs in non-essential operations and processes. Thomson Reuters is no stranger to this trend.

In 2008 the organization announced that it would shed fifteen hundred employees across all of its divisions globally and about half of these cuts were targeted in European positions (The Economic Times, 2008). The organization must now find ways to handle the same operations with a smaller staff. In this environment redesigning operations and processes to take advantage of outsourced labor in non-essential business functions can allow the organization to secure resources to maintain the most critical functions in the organizations strategy.

Outsourcing can create a wide range of objections and debate among academic and investors however (Benson, et al., 2010). For example, one disadvantage to outsourcing internationally in developing markets is that these countries often lack the judicial system to protect property rights (Goldberg, 2009). Thus by outsourcing processes organizations can make themselves vulnerable to certain risks. However, there is also much that can be gained from outsourcing.

Outsourcing can be defined as "purchasing ongoing services from an outside company that a company currently provides, or most organizations normally provide, for themselves"; these activities may range from manufactured parts to services, such as payroll, human resources, and accounting among many others (Godhar & Deshpande, 2009).

Outsourcing of process and activities that do not directly add value to the goods or services that a company produces can allow it to focus its internal resources on processes that are value creating and improve its overall value proposition which can in turn make it more competitive. More and more companies have realized that information technology (IT) outsourcing, once viewed as a cost reduction tool, could facilitate and even enable the transformation of their core business processes and have dramatically extended the scope of interorganizational collaboration (Li, 2014).

Through collaboration organizations can focus solely on their core competencies which have been shown to actually improve these competencies in some organizations. Therefore outsourcing can have significantly more benefits to an organization than just cost savings alone. By creating strategic and enduring outsourcing partnerships an organization can create value in a wide range of different perspectives.

One study has even found that outsourcing functions such as research and development (R&D) has led to positive outcomes in product innovation (Bertrand & Mol, 2013) Outsourcing functions such as information technology development has been a popular option for many years. However, some studies have suggested that non-IT expenses can increase when IT outsourcing is used (Han & Mithas, 2013).

Yet the savings in IT related expenses generally justify these increases and an efficient internal IT team that can manage external IT outsourcing has also been shown to be a valuable strategy (Han & Mithas, 2013). The internal IT can then ensure that the overall IT strategy is being met by the external partners and act as project managers in the process which can reduce the expenses of other departments.

Research Objectives The critical question is exactly which operations are suited to be outsourced and how best to handle creating these partnerships. Thomson Reuters mission is to be the world's leading source of intelligent information for businesses and professionals and has annual revenues that exceed twelve billion dollars (Thomson Reuters, N.d.). The organization has focused on information and different methods of information delivery as its core competency.

Agility in globally distributed information system development (ISD) and has worked to overcome many cultural and communication challenges that has been commonly associated with outsourcing certain business functions (Sarker & Sarker, 2009). Thus the capabilities for outsourcing have grown and can now effectively and efficiently handle more processes seamlessly and without disrupting essential operations. One example of the way that the company has innovated to deliver information in new ways can be illustrated with the Elkon Desktop analytic software package that it offers.

From the intuitive Eikon desktop, professionals can click on a stock or commodity symbol and immediately see a corresponding social media feed, including up-to-the-minute analysis of the prevailing mood and they can also follow relevant news stories and gauge sentiment in that channel (Thomson Reuters, 2014). Innovations can put the relevant information in front of individuals in new and creative mediums. However, identifying and defining what operations are non-essential to this process and outsourcing these processes to partners is the challenge that the organization will face.

Justification for the Research Thomson Reuters is a large multinational player that experiences competitive pressures from other organizations in its own industry as well as other industries that can serve as substitutions to its services. The organization virtually has no choice but to streamline its operations to ensure that it is focused on the niches that add value to its customers. Identifying the non-essential operations in the company's operations and creating a strategy to outsource these processes could be vital to the organizations sustainability.

With the broader capabilities that outsourcing partners can now offer, it is likely that Thomson Reuters will find many opportunities to outsource most processes outside their value chain and possibly even some processes that are viewed as essential. Outline Methodology To determine what processes and operations stand the potential to be outsourced to outside organizations an analysis of the organizational structure will have to be conducted. Business processing mapping is one tool that can allow these processes to be explored and analyzed.

The organization can use a process map to determine which processes are value creating and which are non-essential functions that might be outsourced to a strategic partner. There are also many other considerations that must be made before the organization can determine which business functions to outsource. Thompson Reuters has built their core competency around the presentation and exchange of information.

Therefore it will have to ensure that it does not make itself vulnerable to any security risks that might be present by allowing external organization to access key internal information. These risks will have to be identified and a mitigation strategy will have to be developed. The organization will also have to deal with its intellectual property rights and create a strategy to best protect these resources. However, as outsourcing has increased in popularity, there have been.