What Are Advantages and Disadvantages of Outsourcing?

EM Admin
Jun 12, 2018
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Could you play multiple roles in your real business?

I mean-Can you be a sole bearer of sales, marketing, packaging and production responsibilities?

Positively, you can’t handle all these domains single-handedly. You might have knowledge and experience of multiple domains. But, when it comes to specialty, it can in any core area. That can be only one or two. If you’re an exception, perhaps, you might have multiple skills. But in that case also, you won’t have time, energy and efficiency in all domains simultaneously.

Outsourcing is Must to Hire Skills of Non-Core fields:

So! How could you meet your all business requirements?

This query ends at outsourcing. Let’s say, you need a reputed and veteran player of data mining. You want to scale up your textile business across the US. But, your business roots lie in the UK. To know about the US clients, you should have its market exposure. Concrete support of facts and figures can fulfill what you want.

Alongside, there are a variety of pros and cons of the data outsourcing. You should do your homework squarely before hiring a data outsourcing company. I have dedicated a bit of efforts to let you know how it can prove positive as well as negative for your company.

But, is it feasible that you churn out the data of the prospective US clients yourself? It’s actually not so. After all, you’re not a jack of all trades. If you’ll try to be so, you would be a master of none. It’s not your core competency. At that crucial point, outsourcing comes into play. You would need solid supports of a third party that can handover a rich & contextual data. That’s what the outsourcing is all about.

Have a look over a variety of advantages and disadvantages of outsourcing:

Advantages of outsourcing:

1. No expenditure over hiring:

You hire skills and expertise on a contract from an outsourcing company. You don’t have to recruit more employees for that non-core work. It’s an explicit saving on money & time. You won’t have to expend on training and incentivizing them.

2. An excess to remote talent:

Inbound recruitment delivers a limited stock of skills. And, that talent would be small and restricted. Here, outsourcing makes sense. It lets you access an amassed pool of international talent. So, why do you choose a local talent if you can have a specialized expert?

3. Low labour cost:

A survey report published on credit donkey says that 60% of the total outsourcing market is dedicated to IT workers. Do you know how many percent does the cost factor into outsourcing decision? It’s around 87 percent.

There are hundreds of companies that have different reasons to employ an outsourcing company. Some of them don’t want to trade of quality. Fortunately, outsourcing often delivers you the best of quality and quantity at the best price.

4. Focus on business development:

The idea of business development tosses out when you devote time & energy to it. Thanks to outsourcing! It frees up mount of millions of bucks. Thereby, you achieve a lot of time to think of scaling up.

5. Flexibility:

How many hours do you spend on your business a day?

Generally speaking, it’s in between 8 to 12 hours. But, outsourcing is far away from this time-bound factor. The scope of flexibility is a lot in it. You can manage it for 24 hours a day by utilizing time-zone differences.

You can’t make a better judgment unless you compare its upsides with its potential downsides. So, let’s catch on what these are:

Disadvantages of outsourcing:

1. Compromise on proactive control:

Sharing the workload with a third party can prove terrible. You do hire it on a contract. But, you have to surrender a bit of control over your data. It’s where the loop is. That party works off-the-site. You have to share a lot of sensitive credentials remotely. It makes setting up a proactive control a hard nut to crack. You can’t maintain a level of control that you think of.

2. Communication dots:

It’s the biggest disadvantage of hiring a third party. There are several factors that create the rift in a communication, like:

Differential time zone and business hours
Method of communication, like email, whatsapp messaging, phone etc..
Accessibility to internet of both parties

An article on researchgate.net states that 59 percent of all projects fail. It blames the cultural difference in communication style. Any kind of miscommunication ends up at failed deadlines, hidden costs, lack of motivation & commitments.

3. Covert costs

How is it if a merchant charges separately for a bag and its packaging? What if you want an extra sling along with? He will definitely charge more. Thereby, you won’t like to purchase anything from that merchant.

Likewise, the outsourcers impose a covert cost or a hidden cost. Your ultimate motto of deploying a remote assistant is cost-cutting. But, the cumulative costing of a data miningproject defeats that purpose. Therefore, you need to discuss subtly about all verticals.

4. Quality deters:

Nearly, 50% employers are disappointed with the quality, according to a survey report. It would be beneficial if you look into the quality that you receive. Like every aspect of the project, exchange words over what quality you require upfront.

5. Negative culture of a company:

It won’t reap any good if you ignore the negative impact of outsourcing for your business. You should keep these facts in your mind while looking for assistance from a third party:

Your inbound employees would feel as if they are replaced.
They will be puzzled over particular tasks.
They would take daily work as a challenge.

It’s not necessary that sharing workload with other would cast an adverse impact only. But still, you have to protect their rights and prevent their opinion from being negative. Take their opinion while considering for this kind of assistance.