Outsourcing – Is It an Advantage or a Disadvantage?
By Revie Sevilla
Outsourcing can be both beneficial and non-beneficial depending on your reason why you choose to outsource.
To begin with outsourcing, according to Wikipedia, “is the process of contracting a business function to someone else”.
But why outsource if the job can be done in your own company by your own employees? Therefore, the reason behind outsourcing plays a vital role in the decision to avail of services outside the company.
Outsourcing is a very popular idea nowadays and there are many companies seeking competitive gain that engage in it. They take advantage of the higher chances of getting ahead as they focus on the company’s core competencies.
Some beneficial gains a company can derive from outsourcing are:
For a company that is meeting a client expectation on occasional projects, not buying expensive hardware and software just to complete the project means savings if it can be outsourced. Training and spending on staff to learn additional skills for tasks that are seldom assigned is not practical.
Reduced Management Headache
Naturally when you outsource, you get the one that can one hundred percent do the job right and on time for you or you don’t pay. The troubles and costs of trial and error are avoided.
More Time for Core Company Processes
When you outsource, management and staff are able to concentrate on what your business is really all about thereby giving the business the much desired competitive advantage. Outsourcing non-core related tasks or assignments allows a business more time to focus on what could grant the business more strength in terms of positive productivity.
However, it is not always advantageous to outsource. Below are some of the reasons why outsourcing can sometimes work to your disadvantage:
Because you can’t fully manage the project you choose to outsource, you can’t expect to apply full control over it unlike when it’s your staff that handles the job. Careful selection of a reliable and trusted outsourced services provider is essential.
There are certain risks that may be involved such as when the outsourced company goes out of business at a time critical to you. Finding and quickly transitioning to a new company may or may not be harmful to your business.
May Cost More
Outsourcing definitely means additional expenses because you will have to pay extra for the job you wish completed. It is important that when you choose to outsource, it is because there’s more gain to be had from it than losses.
Security and Confidentiality Concerns
There is the risk of exposure especially if what’s outsourced is payroll where confidential details such as salaries get to be known by the company that will do the job for you.
A simple research and not regarding outsourcing as a mere money-saving measure may save you the troubles of the disadvantages. Just make sure you have a valid reason in getting the help of an “outsider” and that you have weighed its pros and cons carefully.
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