Pros and Cons of Outsourcing: One of the greatest benefits of outsourcing is that it reduces the operating costs of the organization by taking care of the various secondary processes. When a third-party service provider handles the supporting portions of the business operations, the company always has its capital funds available for the major core business area. Outsourcing has become a new trend in modern day business. It is basically done for an organization with a view to reduce costs and to concentrate on the core activities of the business. This would help the organization by saving it significant amount of precious time and resources. Outsourcing has many advantages but at the same time it has some disadvantages that cannot be ignored.
The Advantages
Outsourcing the help and support system to a third party service provider can be an excellent alternative for you if you have a restricted number of employees, but are looking for a way to provide customer support services 24/7.Most of the business owners feel that, outsourcing is the core process of their business. Outsourcing makes lots of sense; simply because it is beneficial in many ways for your business.
The organizational resources are set free for other important purposes. At the same time, it facilitates an organization to access world-class expertise and solutions of people and systems. The idea behind outsourcing the tasks is to complete the overall process in quick time in order to gain competitive advantage.
By outsourcing job duties to non-employees, a business does not have to pay consistent wages or offer additional employee benefits. The liability of a service provider is higher than that of an in-house employee. This makes working with them a safer bet for businesses.
By outsourcing, your company can save on management problems as your offshore partner will be managing the team who does your work
By outsourcing, you can cater to the new and challenging demands of your customers and Its can help your organization to free up its cash flow.
Pros and Cons of Outsourcing can give your business a competitive advantage as you will be able to increase productivity in all the areas of your business. Outsourcing can help your organization to cut is operational costs to more than half. By outsourcing a non-core function, a business avoids all the headache associated with recruiting and hiring staff for such non-core function.
The Disadvantages
At times, people from remote sources may even offer better skills and experience than those who have been working full time with the company. The present recession in the United States has slashed hundreds of thousands of jobs, leaving most employees homeless. Outsourcing has the disadvantage of not allowing bosses to fully monitor the activities of employees, primarily due to location. They are limiting their scope of observation based on the own efforts of managers assigned in the same remote region. Assessment of potential workers are limited as well, as bosses can only conduct online interviews or provide short tests to determine or guess the efficiency of workers.
In outsourcing, you may lose your control over the process that is outsourced. Outsourcing, though cost-effective, might have hidden costs, such as the legal costs incurred while signing a contract between companies. We might also have to spend a lot of time and effort in getting the contract signed.
There can be several disadvantages in outsourcing, such as, renewing contracts, misunderstanding of the contract, lack of communication, poor quality and delayed services amongst others.
The disadvantages of off shoring give organizations an opportunity to think about what they are stepping into. However the disadvantages of outsourcing are less than the advantages of offshore outsourcing.