Outsourcing is the act of one company contracting with another company
to provide services that might otherwise be performed by in-house employees.
Often the tasks that are outsourced could be performed by the company itself,
but in many cases there are financial advantages that come from outsourcing.
Many large companies now outsource jobs such as call center services, e-mail
services, and payroll. These jobs are handled by separate companies that
specialize in each service, and are often located overseas.
Reasons to
Outsource:-
There are many reasons that companies outsource various jobs, but the
most prominent advantage seems to be the fact that it often saves money. Many
of the companies that provide outsourcing services are able to do the work for
considerably less money, as they don't have to provide benefits to their
workers and have fewer overhead expenses to worry about. Depending on location,
it may also be more affordable to outsource to companies located in different
countries.
Outsourcing also allows companies to focus on other business issues
while having the details taken care of by outside experts. This means that a
large amount of resources and attention, which might fall on the shoulders of
management professionals, can be used for more important, broader issues within
the company. The specialized company that handles the outsourced work is often
streamlined, and often has world-class capabilities and access to new
technology that a company couldn't afford to buy on their own. Plus, if a
company is looking to expand, outsourcing is a cost-effective way to start
building foundations in other countries.
Possible
Disadvantages:-
There are some drawbacks to outsourcing as well. One of these is that
it often eliminates direct communication between a company and its clients.
This may prevent a company from building solid relationships with their
customers, and often leads to dissatisfaction on one or both sides. There is
also the danger of not being able to control some aspects of the company, as
outsourcing may lead to delayed communications and project implementation. Any
sensitive information is more vulnerable, and a company may become very
dependent upon its outsource providers, which could lead to problems should the
outsource provider back out on their contract suddenly.
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