Before getting to the advantages and disadvantages of outsourcing, we must understand what is outsourcing first and then we will get to the advantages and disadvantages. Outsourcing is actually like a deal in which a company or an organization deals with another party so to do their job of producing goods which were produced in-house. These were performed by the employees of the company but hiring other party can cause the changes in the jobs ranging from many fields. Outsourcing was actually formed as an integral part of international business economics in 1990. however, outsourcing has raised many slogans among the ones who don’t support it. The reason was that there was an considerable amount of loss noticed in the domestic jobs. However, there were also the supporters who said that the Advantages and Disadvantages of Outsourcing is actually an good option in the field of business. Outsourcing has proved to be beneficial for the business as it deceases the cost of labor significantly and can also the expenses of many things. Well if you are a manufacturer of a washing machine and if you buy its internal machinery from another party then it can cost you less.
Outsourcing can not only save costs, organizations can simply hire other parties in order to concentrate on the core factors of the business. However, outsourcing non-core aspects can increase the production and the efficiency and this all is because another body does these tasks and since someone else does these, the actions performed are better than what the organization can perform. This is just a law that if you many things to do then you cannot concentrate on the small things because you have many other important things to simply do and that you don’t have the time as well as interest. Since you have other large tasks, you cannot bring yourself to perform these tasks even if you do your all because in your sub consciousness there will be other tasks weighing down your options. This not only decreases the whole cost of the organization but also boosts up the business and gives other the competition they require and what you can put.
Whereas, business which decides to choose outsource internationally gain the benefits because it decreases not only labor cost but it also decreases the production cost. If they have problems in the budget if they produce in-home, they can simply choose another firm. However, at international level, the business may choose some cheap country where it can find the benefits in the low production costs and so that it can also oppose the other competitions. However, once others turn towards the same option then the pricing changes and there is no benefit anymore. You simply call it globalization. Eventually this process of globalization increases and the level is balance until no benefits can be gained from the same firm. All the benefits start to decrease from the cost to the competition. It all decreases with the time. This Advantages and Disadvantages of Outsourcing is just like the domestic outsourcing, due to which the cost of production and labor is reduced and the money of the business is saved. This way the tasks are done by
other non-employees who not only cost you less but also perform the task with much correction and precision. However, when you are in another country, you may need the individuals who also know their language but in this way you have to pay a little more but in this way you could also benefit yourself more. This is actually really good until others are not also attracted towards the same way so that the savings may decrease.
Now lets come to the disadvantages and drawback of Advantages and Disadvantages of Advantages and Disadvantages of Outsourcing ; The first drawback is that when you go and look out for another party to do your work then you must go a long way to search for the other party that is willing to work for you. You have to search for a long time and this process is actually very long. You have to spend extra time and efforts in such and this is not easy. You may have to wait for many days and have to constantly go in the market and look for the firms that would be willing to work for you. This process of finding such firm is not easy and you have to continuously put your efforts in such.
Another disadvantage in such is that if the third party has the information about the company then it may be leaked. This matter becomes even more disastrous when the information is confidential. The biggest threat is that the information may be leaked to the other competitors. This only happens when the third party has the access to the information of the organization. This becomes even larger threat if the information is top secret. This may cause a great loss in the company because it may suffer a data breach in such case.
Then there is loss if in such circumstances the company is unable to maintain the communication with the third party and it may cause a great loss if the person of third party is away on an important task in another country. Such conditions can simply cause a huge uproar in the future for the company. It can make a huge loss in the way of the company and if that individual also has confidential information then it may become even huge of a problem for the company and that’s why it is an huge drawback in the case of outsourcing.
Then there is another uproar that due to the Advantages and Disadvantages of Outsourcing the net jobs have decreased to a great extent and there is a significant change in the U.S. economy. However, there are still the supporters who do not oppose the idea of outsourcing and are also rooting for the outsourcing as it has given jobs to those who couldn’t find ones. There are also those who do not support the idea of Advantages and Disadvantages of Outsourcing as they say that it has caused many problems. If you don’t have the authority over that person then it cause harm to your company as he will no longer be listening to you and will do what he wants, he may leak the data to the competitors and you will be able to do nothing but just sit. This is a huge flaw when it comes to Advantages and Disadvantages of Outsourcing and that’s why the third party members should be hired carefully because there is a high chance that he may be a spy and is only getting hired in order to get the info that is needed by the competitors.
If the company hires another party employee then he must take all the responsibility when it comes to the providing of the instructions of the tasks that he will be completing. If the provider is not experienced in the firm then he may give some wrong instructions that may lead the company into loss because to give the advantage to the company, he must prove to be beneficial to the company or else there will be no meaning. The individual of the third party will solely act on the instructions given by the provider or else he may ruin everything, this is the rule that the provider must follow.
Since the provider deal with all the other individuals, they may not be able to give all the attention to a single individual and that is why they may not be able to provide all the information and instructions to a single person which may result in the loss of the success because in return that single individual may not be able to give all the benefits to the company. That is why this results in the loss of the company and this can actually lead the company to a greater loss in the future.
In some cases, the third party member is not able to understand the nature of the job and cannot bring himself to do the job properly and that is reason why making him understand the purpose of the job is really important and you have to be sure that you are giving him the information thoroughly but just make sure that you are not giving the information that is confidential because the risk of breach may occur. You just have to make sure that you have made it clear for him to execute the job properly.
You have to realize if the aspect being outsourced is really important then you have to take the risk that budget may suffer. And even huge budget problems may arrive if the aspect being handled is really important. You have to make sure that the risks taken in this path are not too high because as it may blow off your budget. You have to make sure that the individual must understand the every prospect about the factor being outsourced. You just have to be sure that you are not taking too much risks. fidn this post is good for Advantages and Disadvantages of Outsourcing.