What are the Benefits of Outsourcing? What are the Disadvantages?

Ryan O'BlenessRyan O'Bleness Birmingham, Mich. Posts: 409administrator Site Admin
I am looking to hear from our community! Do you think outsourcing is a good idea, or bad? What are the pros and cons? 
Ryan O'Bleness
Community Moderator
StartupNation, LLC

Best Answers

  • ross03ross03 VietnamPosts: 13subscriber Bronze Level Member
    Accepted Answer

    The Advantages:

    1. Swiftness and Expertise: Most of the times tasks are outsourced to vendors who specialize in their field. The outsourced vendors also have specific equipment and technical expertise, most of the times better than the ones at the outsourcing organization. Effectively the tasks can be completed faster and with better quality output
    2. Concentrating on core process rather than the supporting ones: Outsourcing the supporting processes gives the organization more time to strengthen their core business process
    3. Risk-sharing: one of the most crucial factors determining the outcome of a campaign is risk-analysis. Outsourcing certain components of your business process helps the organization to shift certain responsibilities to the outsourced vendor. Since the outsourced vendor is a specialist, they plan your risk-mitigating factors better
    4. Reduced Operational and Recruitment costs: Outsourcing eludes the need to hire individuals in-house; hence recruitment and operational costs can be minimized to a great extent. This is one of the prime advantages of offshore outsourcing

  • ross03ross03 VietnamPosts: 13subscriber Bronze Level Member
    Accepted Answer

    The Disadvantages:

    1.Risk of exposing confidential data: When an organization outsources HR, Payroll and Recruitment services, it involves a risk if exposing confidential company information to a third-party
    2.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
    3.Hidden costs: Although outsourcing most of the times is cost-effective at times the hidden costs involved in signing a contract while signing a contract across international boundaries may pose a serious threat
    4. Lack of customer focus: An outsourced vendor 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

Answers

  • Ryan O'BlenessRyan O'Bleness Birmingham, Mich. Posts: 409administrator Site Admin
    edited February 13
    Thank you for your insights, @ross03, I appreciate it. I agree with you that outsourcing to experts is an efficient way to get something done properly yet quickly, and that is allows you to focus on the core of your business operations. I also agree that you may be compromising confidential information and that the business doing the outsourcing work likely has not done proper research on your target audience and customers. 

    One disadvantage I would add is that if you're offshoring your work to another country, you are taking away jobs from your fellow citizens and not contributing to the economy. It's essentially choosing to save a few dollars over creating more jobs. But I understand that in certain situations it may be absolutely necessary. 
    Ryan O'Bleness
    Community Moderator
    StartupNation, LLC
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