Benefits and Shortcomings of Outsourcing


The popularity of the term outsourcing has increased in America. Outsourcing is not for use in manufacturing only because it is possible to connect with a person in another nation on customer care line. However, being popular is not an indicator of outsourcing being an all-time option. There are benefits and disadvantages of outsourcing.


You will benefit by outsourcing because it lowers labor costs.  Among the core factors that determine the price at which a commodity is sold is the cost of labor.  Companies set prices of products in line with the much they spend on their people.  America has a higher cost of living, making factories to spend a lot in wages.  However, the cost of living is lower India and China, meaning staffs can be paid lower wages and meet their needs.  This makes the cost at which factories manufacture to be low, enabling them to sell their products at prices that are competitive.


It is advisable that you outsource because more hours are created. While the weekly working hours of Americans is 40, technical issues do not care about time.  If this company wants to provide customer support in-house, its offices would need staffs to work 24/7, meaning you could operate with a three-shift program.  Staffs in the office at 0000h may experience issues like insomnia, insufficient sleep, difficulty in concentrating, lack of energy, irritability, and difficulty with personal relationships. For India, American midnight will be day time and it will not be a big deal for people responding to customer service at India. In fact, some IT providers outsource to numerous time zones to add the time services are available. Be sure to learn more about outsourcing in this site.


It is disadvantageous to subcontract because you are not able to control quality.  When a company perform everything in-house; it is possible for owners to do a quality check by walking around.  When you outsource from another company, you will not find it hard to control quality. Therefore, issues can repeat themselves many weeks only to come to your notice when clients complain or you board an overseas flight to look at what is going on.


It is not advisable to outsource as this lowers employee morale.  When staffs feel insecure in their jobs, company morale is ruined.  When you begin to outsource various services overseas, the other staffs start to feel insecure.  They tense and begin to search for greener pastures.


Outsourcing is disadvantaged by cultural barriers.  Value systems differ slightly in different parts of the world and what is acceptable in a region may be a taboo to another.  In case your cultural values and those of the business you outsource differ, business priorities will be different and problems are likely to occur.  A language barrier also brings about frustrations among clients and service providers.

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