Outsourcing is has been around for centuries in various forms. However, it has become more prominent as more and more businesses look to get access to the benefits that it provides. Outsourcing is basically using a separate company or provider for services instead of having them performed in-house. Many businesses are joining the outsourcing phenomenon. In many cases there are financial gains that can be made by taking advantage of outsourcing, but not every aspect of outsourcing is positive.
List of Advantages of Outsourcing
1. Cuts Costs Down
Saving money seems to be the primary benefit of outsourcing. Many companies can get the same services for a much cheaper price by simply having them outsourced. The quality in the services is often comparable, but the price difference is what makes outsourcing so popular. Many companies that provide outsourcing services do so for rates that are much less than the norm. This allows businesses that use outsourcing to cut back on costs and only add to their profits. Money is often the driving factor behind outsourcing.
2. Specialized Services
In some cases, the price break is not the main reason for outsourcing. Some companies are simply looking for these services to be provided by specialists in this select field. For this reason, some services are outsourced and not done in-house.
List of Disadvantages of Outsourcing
1. Language Barriers
Even though outsourcing can be very profitable for some businesses, there are some disadvantages to outsourcing that you should be informed about. The break down in communication is one of the biggest downsides to outsourcing. Since the service is not provided in-house, it can be difficult to keep direct communication as a priority. This means that some businesses find it difficult to build interpersonal relationships with customers if all customer services are outsourced. This can be a disadvantage that can also effect the bottom line, but in a negative way.
2. Job Losses and Employment
It is also important to note that when companies choose to outsource services this does take jobs away from the area in which the business is located. This means that local jobs begin to dwindle and the local economy can take a plunge as a result. Outsourcing can lead to major employment and economical issues if it is not addressed adequately.