Outsourcing: Benefits and Risks

Organizations today opt for outsourcing to give their business a competitive edge. When organizations outsource they can leverage the cost-advantages of outsourcing. By outsourcing its non-core functions, an organization can also concentrate more on its core functions. But with all the outsourcing happening, companies planning to outsource worry about the risks involved. Outsourcing has its own benefits and disadvantages. Knowing the risks and the benefits involved before you step into outsourcing can give you some foresight into what you are getting into.

The cost advantage is a major benefit that outsourcing offers. By outsourcing, your organization can save on money and also get access to the best in technical skills and expertise. India, for example, has a large talent pool of specialists who are extremely knowledgeable and also more advanced in the areas of IT, computers and the internet, when compared to their global counterparts. Indians are also well-versed in the latest in science, information technology etc. Organizations outsourcing to India can stand to gain from this.

Outsourcing has proved to be profitable not just for organizations in Europe and US who wish to reduce costs. It is also beneficial for the outsourcing vendor. India can be taken as a good example for this. Because of outsourcing, workers in India have been able to take a stand in the global market. The Indian economy has also been on the rise with the outsourcing boom. Besides these advantages, you can also save on time, effort, manpower and infrastructure by outsourcing. Although there are so many advantages in outsourcing, there are also some risks involved.

When you start collaborating with your outsourcing vendor, you may not be sure if that company would stay in business throughout the life cycle of your project. There may sometimes be communication gaps because of language barriers. The cultural diversity can also bring up some differences. Differences can bring about problems in the working relationship between the two companies. Organizations must also consider the difference in time zones when outsourcing. Piracy and confidentiality are some of the other risks involved in outsourcing.

Before outsourcing, check the outsourcing partner. Visit the company if possible, to see the organization and its people for yourself. Check with the previous customers about the credibility of the organization and about the quality of their services. Ensure that the company you are outsourcing to, follows Intellectual Property laws. Finally select an organization that will go by the rules and regulations of your organization.

To conclude, we can say that outsourcing involves both advantages and disadvantages. However, there can be few or no risks involved if you are able to find the right partner.

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