Pros and Cons of Outsourcing
The term outsourcing has increased in popularity in America. Outsourcing is not limited to manufacturing since it is possible to get customer support from people in other states. However, outsourcing being popular does not make it be the best always. Outsourcing has its good and bad sides as the article below explains.
Outsourcing is advantageous because labor costs go down. One of the major factors that influence the amount you pay for this product is the much labor costs. Prices at which companies do offer their products are determined by the much its labor costs. The cost of living is high in America and this translates to higher wages for factories. However, India and Chinas cost of living is lower and you can pay employees less and meet their needs. This makes the cost at which products are manufactured, making the price at which manufacturers offer their products more competitive.
It is helpful to outsource because it avails more hours. While there are 40 working hours a week for the Americans, time is not a concern when technical issues are concerned. In case a company is interested in providing customer support in-house; staffs have to be in offices the whole day all week. Staffs in the office at 0000h may experience issues like insomnia, insufficient sleep, difficulty in concentrating, lack of energy, irritability, and difficulty with personal relationships. However, if someone in India answers customer service at midnight, it is day time for them. In fact, some IT providers outsource to numerous time zones to add the time services are available.
Outsourcing is disadvantaged in that there is less quality control. When your company does everything in-house, you can perform the quality check by walking around. When you outsource from another company, you will not find it hard to control quality. Therefore, issues can repeat themselves many weeks only to come to your notice when clients complain or you board an overseas flight to look at what is going on.
It is disadvantageous to outsource because it lowers staff morale. When staffs feel insecure in their jobs, company morale is ruined. Upon starting to outsource different services overseas, the remaining employees begin to feel insecure. They tense and begin to search for greener pastures.
Outsourcing is disadvantaged by cultural barriers. Value systems differ slightly in different parts of the world and what is acceptable in a region may be a taboo to another. If the outsourced company does not have the same cultural values as your business, they may have different business priorities hence causing problems. A language barrier also brings about frustrations among clients and service providers.