Advantages and Disadvantages of Outsourcing
The term outsourcing has widely spread in America. Outsourcing is not exclusively for manufacturing because you can get someone from a different nation on the customer support line. However, being popular is not an indicator of outsourcing being an all-time option. There are benefits and disadvantages of outsourcing.
Outsourcing is helpful since it helps one to cut labor costs. One of the major factors that influence the amount you pay for this product is the much labor costs. Companies determine their prices in relation to the amount they pay its people. The cost of living is high in America and this translates to higher wages for factories. However, the cost of living is lower India and China, meaning staffs can be paid lower wages and meet their needs. This makes the cost at which factories manufacture to be low, enabling them to sell their products at prices that are competitive.
It is advisable that you outsource because more hours are created. While Americans work for 40 hours a week, technical issues are unconcerned with matters of time. 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. For India, American midnight will be day time and it will not be a big deal for people responding to customer service at India. In fact, some IT providers outsource to numerous time zones to add the time services are available.
It is disadvantageous to subcontract because you are not able to control quality. When a company perform everything in-house; it is possible for owners to do a quality check by walking around. Outsourcing from a different country makes it hard to control quality. Issues can thus go on for weeks only to be noticed when customers complain or one taking an oversee flight to check what is happening.
Outsourcing is disadvantageous in that is lowers the morale of employees. When employees are not secure in their jobs, company morale gets damaged. When you begin to outsource various services overseas, the other staffs start 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. In case you outsource a company whose cultural values vary from your companys, they will have business priorities that differ, thus causing chaos. Also, language barrier brings about frustrations among service providers and customers.
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