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Advantages and Disadvantages of Outsourcing

The term outsourcing has widely spread in America. Outsourcing is not exclusively for manufacturing because you can get someone from a different nation on the customer support line. However, popularity does not mean you should always go for outsourcing. Outsourcing has its good and bad sides as the article below explains.

You will benefit by outsourcing because it lowers labor costs. One of the major factors that influence the amount you pay for this product is the much labor costs. Companies determine their prices in relation to the amount they pay its people. The higher cost of living in America makes factories to pay higher wages. However, India and Chinas cost of living is lower and you can pay employees less and meet their needs. This makes the cost at which products are manufactured, making the price at which manufacturers offer their products more 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. In case a company is interested in providing customer support in-house; staffs have to be in offices the whole day all week. Employees who work at mid-night get disorders such as insomnia, difficulty with personal relationships, difficulty in concentrating, irritability, lack of energy, and insufficient sleep. However, people answering this service in India at midnight will have no issues because it is day time in India. In fact, some IT providers outsource to numerous time zones to add the time services are available.

When you outsource, you are disadvantaged since you have less quality control. When your company does everything in-house, you can perform the quality check by walking around. Outsourcing from a different country makes 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 disadvantageous to outsource because it lowers staff morale. Company morale is at stake when workers feel they are not secure with their jobs. Upon starting to outsource different services overseas, the remaining employees begin to feel insecure. The staffs tense and embark on the search for better jobs.

Outsourcing has shortcomings due to cultural barriers. Value systems slightly differ in various parts of the world, making what a region sees acceptable to be a taboo in another region. In case you outsource a company whose cultural values vary from your companys, they will have business priorities that differ, thus causing chaos. Language barrier also creates frustrations among customers and service providers.

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