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

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Answers

  • ideasunlimited1ideasunlimited1 subscriber Posts: 30 Bronze Level Member
    I think it is important to be careful of outsourcing from just a random freelancer, as opposed to going through and agency or org that does actual background work for a candidate. You want outsourcing to be mutually beneficial where they are following your standards and can jump right in, but they also get compensation for work and a referral. There is a lot of opportunity for long term career investment where you save costs and have control if done the right way.
  • KRoksolKRoksol USsubscriber Posts: 9 Member
    edited June 2019
    Hi. I think outsourcing is a good idea! But all depends on your business strategy. Example, If you want to experiment with something, you will don't need to hire people. It saves time 
  • KRoksolKRoksol USsubscriber Posts: 9 Member
    I like this book:
    The Mom Test: How to talk to customers & learn if your business is a good idea when everyone is lying to you
    I hope it helps you with the quality question to your side.
  • Taskenator Ltd.Taskenator Ltd. subscriber Posts: 10 Bronze Level Member
    Outsourcing lets you cut costs and save big, it will also allow you to hire experts in the field that you need help with. You will also be able to focus on your core activities and prioritize tasks as well as be able to run your business 24 hours a day / 7 days a week.

    Disadvantages like issues arising on quality of output given, as well as threats to security of confidential files and applications.
  • Nishant SharmaNishant Sharma Chandigarhsubscriber Posts: 9 Member

    Outsourcing has proven its worth in the past. And now, it has become a multi-million dollar industry, helping both startups and established companies to gain an edge over the competition. Let's find out how!

    Benefits of Outsourcing IT Services:

    1. Cost Reduction

    Cost is one of the primary reasons why companies outsource. When you choose to work with an offshore partner, you can significantly reduce the development cost in terms of the following:

    • Hiring Process (job posting, scheduling interview, and screening process)
    • Overhead Salary (difference in hourly rates of developers of different countries)
    • Employee Benefits (salary increments, medical insurance, training, etc.)
    • Infrastructure (hardware and software requirements)

    2. Staffing Flexibility and Access to Specialists

    Sometimes, there comes a situation when it becomes difficult to hire developers in your native locality, state, or country. In this case, when you choose the IT staff augmentation model, you can hire developers just within a few hours or days.

    You only have to inform your outsourcing partner and rest everything else is their responsibility. In short, it gives you the flexibility to scale up or scale down your team quickly.

    3. Focus on Core Business

    Hiring new resources is one of the main distractions. Not only it is a tiring process but also demands a lot of attention. Making a mistake in hiring a resource can cost you a lot of bucks in the future.

    However, when you are working with professionals having years of experience working in your industry, you can direct your focus on core functions. Your increased focus will help you generate more business for your company.

    4. Time Zone Advantage

    Using the time-zone difference, you can reduce the time to market or provide round the clock service to your customers.

    5. Risk Management

    Risk identification and management is an essential aspect of software development. Outsourcing is a process that allows you to share the responsibility of developing your software to another company. This, by default, includes all the risks involved in the process. In short, outsourcing allows you to meditate software development risks.

    The above outlined are the most essential and foreseen benefits of outsourcing. A few others include:

    • Better productivity from the in-house team
    • Improvement in quality and user satisfaction
    • Increase in the overall business process
    • Outsourcing itself offers a wide range of benefits; however, it largely depends on the two essential aspects:
    • The location you are outsourcing.
    • Reliability of your outsourcing partner.

    P.S. - While deciding to outsource, wisely select the location and outsourcing service provider.

    However, if you fail to choose a reliable outsourcing partner, this business strategy can prove devastating for your project. Let's discuss some common problems to outsource software development.

    Disadvantages of Outsourcing

    1. Loss of Control:

    While outsourcing, you are hiring an offshore team. What are the odds that your project is given adequate attention? To ensure that your team is working efficiently, you have to micromanage each and everything.

    If you are stuck with a non-competent outsourcing partner, expect the work to take four times longer to complete.

    It may happen because of miscommunication, delays in implementation, etc. Whereas, working with in-house team assures consistent monitoring and changes required will be done right away!

    2. Communication:

    Communication gap is one of the significant potential drawbacks while outsourcing. The possible reasons behind poor communication may be the time-zone difference, non-reliable internet connection, language, cultural difference, etc.

    3. Quality Issues and Impact on Company's Culture

    Due to lack of communication and trust factor, there's a big chance that the quality will suffer. Moreover, it can pose a severe impact on the company's culture for the following reasons:

    • Low quality will impact your market reputation.
    • Employees may feel upset & confused about getting replaced.

    Working in sync with a team of offshore developers can add challenges to the daily workflow of a company.

    The above mentioned are a few challenges you can face while outsourcing. However, it's possible to dodge or mitigate those risks by collaborating with a reliable and trustworthy outsourcing company.

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