The Pros and Cons of Outsourcing

Do you often wonder if outsourcing is the right way to grow your business? In today’s business world the buzz word is “outsourcing”. There a countless books, articles, speeches, blogs and webinars on the subject of outsourcing. All this information can help you decide if outsourcing is good for your business, but it is the understanding of the pros and cons of outsourcing that can help your organization make an informed decision. The following is a list of the pros and cons of outsourcing:

The Pros of Outsourcing

  • Your organization can become more flexible to change with outsourcing
  • Outsourcing can give you increased control over your business
  • Experience a freeing up of your cash flow with outsourcing
  • In outsourcing, you can share your business risks
  • Outsourcing can free you from management problems
  • Offshoring can help you benefit from professional and expert services
  • Outsourcing can help you save more than half of your operating costs
  • By outsourcing, you can be assured that your processes are being carried out efficiently within a fast turnaround time
  • Outsourcing can help your organization save on manpower, training costs, time, effort and operating costs
  • Save on investing in the latest software, technologies and infrastructure
  • You can meet the new and difficult requirements of your customers with outsourcing
  • Increased productivity, efficiency and profits are some of the other benefits of outsourcing
  • With outsourcing, you can productivity and efficiency even in your non-core business processes
  • You can save on capital expenditures by offshoring
  • By offshoring, you can spend more time concentrating on your core business processes
  • Experience a streamlining of business operations with outsourcing

The Cons of Outsourcing

  • Your organization can experience potential redundancies while outsourcing
  • After outsourcing, you might find that conducting the same process in-house would have been more cost-effective
  • Your organization might have to spend a lot of time and effort in getting the outsourcing contract signed
  • If you decide to outsource, you must accept the fact that your organization’s confidential information, such as payroll and tax details will be seen by your offshore provider
  • You might face security, privacy and confidentiality threats in outsourcing
    In outsourcing, you might have to bear hidden costs, such as, legal costs incurred while signing a contract
  • Managing business processes outside your organization might prove to be difficult, when compared to managing processes within your organization
  • When you start outsourcing your business processes, your organization might suffer from a lack of customer focus
  • Your organization might lose control over the processes that are being outsourced
  • Your business processes might suffer if your outsourcing provider becomes bankrupt or goes out of business
  • The staff in your organization might not accept the idea of outsourcing and may show a lack of interest at work
  • In outsourcing, your offshore partner will not be completely devoted to your organization, as your offshore provider will be providing services to several companies
  • Poor quality, lack of communication, cultural differences, and time delays are some of the other cons of outsourcing

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