Pro and Cons of Outsourcing
Outsourcing has many advantages but at the same time it has some
disadvantages that cannot be ignored. So let us look at some
outsourcing pros and cons.
Pros of Outsourcing
Outsourcing as a trend has come into major scrutiny by the workers
and media alike in the developed countries. But most economists are
sure that this condition is just a temporary one and will die down
as conditions develop and people start taking a mature outlook
towards outsourcing. The Outsourcing advantage lies in the fact that
it helps companies cut costs and stay ahead in the competition.
Outsourcing also benefits the citizens in developed counties as it
provides high quality products at a cheaper rate also with better
customer service.
Advantages of Outsourcing
• Companies can save up on operational costs. In fact most companies
can cut their operating costs to half by outsourcing
• Get access to cheaper and more efficient labor
• Cut up on labor training cost
• Get access to better technologies at a cheaper cost
• Increase productivity
• Concentrate on core competencies
Companies today want to make use of the outsourcing advantage in
order to progress and stay abreast of the competition. This is the
reason why more and more companies irrespective of certain failures
are entering the race of outsourcing.
Cons of Outsourcing
Outsourcing is seen by companies in developed countries and workers
in developing countries as a boon. But is the situation really that
green? Let us look at some disadvantage of outsourcing.
Disadvantages of Outsourcing
• The company that outsourcers can get into serious trouble if the
service provider refuses to provide business due to bankruptcy, lack
of funds, labor etc
• Outsourcing requires the control of the process being outsourced
by transferred to the service provider. Thus the company may loose
control over its process
• The service provider in developing countries generally services
many companies. So there are many chances of partiality owing to
more payment by other parties
• The current employees in the company that outsourcers may feel
threat due to outsourcing and may not work properly
• The attitude of people in the developed countries against
companies that outsource is generally bad
These disadvantages are the reasons why companies should think twice
before outsourcing. Companies should adopt a planned approach
towards outsourcing taking into account the interests of employees
and customers alike and come up with a balanced advance. Outsourcing
services simply to beat competition or to follow your competitors
can lead to problems in the future.
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