The Positive and Negative Effects of Outsourcing

Outsourcing business process is the trend in today’s world to keep up with growing costs of keeping a full time employee and to get more number of people with diverse skill sets do various jobs without many obligations.

Because every coin has two sides and there are both benefits of using this approach and there are problem areas. Today I will discuss the Pros and Cons that outsourcing has.

Let’s Firstly Concentrate on the Positive Side:

1. Concentrate on More Important Aspects of your Business: You have more important things to attend to like sales, marketing, product development in my case. There are certain parts that are important but are not your core competencies can be outsourced and you can concentrate on growing your business.

2. Get an Expert for a specialized Work at very competitive price: Your organization may have different type of work like managing front office, administrative tasks, PR and Media related work. It may not be practically possible for you to keep a different employee for each different type of task. When you outsource you have an option of keeping a regular virtual assistant for relatively regular and repetitive tasks and hire other outsourcing providers for specialized tasks based on the area of expertise.

3. Reduce Overheads by outsourcing cost intensive operations: You can reduce overheads by off shoring tele-marketing, data entry, and Customer Support. This reduces your investment in office space and management.

4. Revive mismanaged areas of your business: The areas of your business that are poorly managed and has dearth of trained people and good managers can be outsourced.

5. Stabilize Your Business: At times when instability is about to creep in your business for reasons like you are overloaded with work and your employee trained on some specific jobs are on leave or do not posses the required skills you can outsource some of the work to offshore companies and/ or people whom you have already tested and tried on some other projects.

Now that we have discussed the pros of outsourcing lets consider the negative consequences.

1. Outsourcing provider compromises on standards: As the contract is established and the outsourcing provider is set to report in a certain manner meeting certain parameters. As they have come to know the process in and they manipulate the reporting system directly or indirectly to maximize profits your business may suffer in the long run and it’s relatively less in your control.
2. Lack of Flexibility: Because the contract has defined scope of work if any addition service or work is required from time to time you need to pay additional charges as the infrastructure and setup is not yours.

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