Outsourcing is a growing trend. Here are the key reasons I can think of:
One Stop Shop Benefit
Web development has many dependent tasks. If you go ahead and hire a developer with on particular expertise, chances are he will need help from others. For example, when client comes with requirements, it needs to be properly translated into development tasks by the project manager. Then that should be reflected in design by the designer. Front end and server side development need separate people. Hiring all of them directly is time consuming. You will have to know the ins and outs of development.
The Specialization BenefitOutsourced firms are specialized. There are some obvious benefits to specialization. My team has completed 5 projects so far. It has worked with other organizations from 6 countries for the last 4 years. We have gone through the learning curve and know what clients want and how we can deliver it. That is why outsourced projects tend to finish earlier compared to in house projects.
The Cost Benefit
The application development cost in North America and Europe is higher than that in South Asian countries. That is partially because cost of living is lower in South Asia.
There are many advantages and disadvantages of business process outsourcing as discussed below:
Advantages of Outsourcing:
There are many advantages of Outsourcing as explained below:
1. Improve your Productivity:
BPO saves time and helps the executives to explore new revenue areas, accelerate other projects and focus on their customers. This leads to improvement in the productivity of any organization.
2. Ideal utilization of the resources: There is an ideal utilization of the resources. BPO enables best utilization of scarce resources. Outsourcing helps to capture new efficiencies and transfer the resources. This increases the efficiency and productivity. Availability of skilled employees and implementation of sophisticated technologies leads to utilization of resources and productivity.
3. Reduction in costs: Cost saving is the major factor driving the need to outsource. BPO helps in reducing overall operational costs of business organizations and boosting all over business profits.
4. Focus on core business functions: Outsourcing document scanning and data entry work to reliable BPO firms often permits more time for business professionals to involve in core business activities, thus generating new income streams. Back office outsourcing also helps business enterprises focus more on customer care, sales and market.
5. Suitable Utilization of time: Business Process Outsourcing is very crucial for saving time and obtaining outstanding services within strict deadline.
6. Refined technology at lower costs: Technology is the leading area of business process outsourcing. Investing in new technology is essential to keep pace with the latest innovations and solutions. Thus outsourcing to companies that have the resources, expertise and desire to continuously update their technological solutions, offers a true advantage.
Generally, the advantages of BPO are very similar to those of outsourcing in general. As the most flexible form of outsourcing, business process outsourcing can bring benefits but involves larger limitations and a smaller scope of application.
Disadvantages of Outsourcing:
There are also some disadvantages of outsourcing as discussed below:
1. Lack of customer focus: An outsourced retailer may be catering to the expertise-needs of multiple organizations at a time. In such situations vendors may lack complete focus on your organization’s tasks.
2. Hidden costs: While outsourcing is considered cost-effective, there are some hidden costs. So before passing an assignment make sure to have the detailed contract paperwork.
3. Risk of revealing confidential data: When an organization outsources HR, Payroll and Recruitment services, it contains a risk of exposing confidential company statistics to a third-party.
4. Synchronizing the deliverables: In case you do not choose a right partner for outsourcing, some of the common problem areas include stretched delivery time frames, sub-standard quality output and inappropriate categorization of responsibilities. At times, it is easier to regulate these factors inside an organization rather than with an outsourced partner
So it is necessary to know the advantages and disadvantages of business process outsourcing before ensuring any task to an outsourcing service provider.
Equate the nature of services offered by various business outsourcing service providers and indicate to a BPO firm that you feel that you can meet your specific wants.
Ryan O'Bleness said:
Thanks, @Tom Adams. There are many pros to outsourcing, but there are some cons, too: hidden costs, not being able to manage the project your way, possible security threats, not ideal response time, quality of products, etc. I think outsourcing works well for certain projects, but it may not always be the best decision. I think advantages and disadvantages need to be considered each time outsourcing is on the table.