3 pros and cons to outsourcing business offshore

Outsourcing is alive and thriving, Sample this. The number of outsourced jobs from the US alone adds up to about 3,00,000 while the worldwide revenues from this industry runs into hundreds of billions of dollars. Every year. In the last two decades some of the biggest names in the world of business have all outsourced some part of their operations to overseas destinations.

Outsourcing is alive and thriving, Sample this. The number of outsourced jobs from the US alone adds up to about 3,00,000 while the worldwide revenues from this industry runs into hundreds of billions of dollars. Every year. In the last two decades some of the biggest names in the world of business have all outsourced some part of their operations to overseas destinations.

Though it must be added that IT workers make up a large chunk of this outsourcing market & Asian countries like India and China have proved to be the biggest beneficiaries of this outsourced business. But in recent years the economic crisis in some of the Western countries (read the US) has meant that jobs have become hard to come by.

Which is when many started questioning the need to hire foreign workers especially when unemployment is on the rise locally. For business owners wanting to outsource work it might be worthwhile to weigh both the Pros and Cons before taking the plunge.

 The Pros

1. It is cost effective – No matter what anyone tells you this is always the number one reason why outsourcing is done. Running operations becomes less affordable when you have to look at hiring new employees (at significantly higher pay) locally. You will need more space to accomodate them and have to provide them all resources (training, documentation, tools etc) that are required in a workplace. Do the math and you will notice that the overheads will go up significantly.

2. Focus on core business – To cite a practical example many multinationals prefer to outsource their customer services whereby they can then concentrate their energies in core areas, thus bringing the business to more competitive levels in the global market. As a result of which quality time can be spent on increasing the visibility of the product or business which can only mean an increase in revenue to the company.

3. Time bound professional delivery of services – Usually businesses opt to outsource to those vendors who are specialists with several years of experience in their line of work. This is because in today’s highly competitive market the value of time is immense. And it is only to be expected that these offshore workers are able to give quality output, in double quick time and at a fraction of the costs. Making it an ideal situation for any business to be in.

 The Cons

 1. You are not in charge – It is important to note that the moment you choose to outsource a particular process or part of the operation you cease to have complete control over matters. The value systems and standards that your business adheres to may or may not be shared by the entity that does your outsourced work. After all it is not their reputation that is at stake.

2. Privacy and confidentiality – Breach of privacy and loss of sensitive data are two factors that all end users are extremely worried about, especially when it comes to divulging any information that might get compromised. This is even more so if they are dealing with an outsourced company that is based offshore. If the correct checks and balances are not in place any slipups can have quite a negative bearing on the business as a whole.

3. Cultural & linguistic barriers – Every country has it’s own unique culture and lifestyle. As a result of which the place to which your business outsources work may have a work ethic that differs vastly when it comes to dealing with customers. This will mean a whole of disgruntled, unhappy people and the impact of such a communication gap on your business can never be good.

In conclusion it must be said that outsourcing your business operations to an offshore destination has more pluses than minuses. As long as due diligence and proper planning has been done before arriving at a decision it should be smooth sailing for all parties concerned. But always.




Pros

1. It is cost effective
2. Focus on core business
3. Time bound professional delivery of services

Cons

1.You are not in charge
2. Privacy and confidentiality
3. Cultural & linguistic barriers

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