What are advantages and disadvantages of outsourcing?

Answer 1

OUTSOURCING:

Advantages:

Saves time and effort - let the service providers take care of it.

Focus - the company can focus on the on-core functions.

Cheap - many service providers will do the task with low price. Don't have to spend on equipments, trainings and etc.

Quality - quality is good when handled by professionals.

Disadvantages:

Security - can be risky when sharing important data to outsiders.

Control - not totally in control on outsiders.

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Answer 2

So you ask yourself, "What should a company facing outsourcing decisions do?" The economics of offshoring can be very compelling but there are other factors that should be taken into account. Foremost, a company should keep its customer's experience in mind when dealing with outsourced entities. The social impact of laying off employees aside, the apparent economic gain in offshoring might not even offset the loss of revenue and (usually very high) re-acquisition costs resulting from the customer having a less than optimal experience and becoming disloyal. But the realty of business means that BPOs are, in general, a necessity in today's competitive environment. So when the time comes for your business to consider business process outsourcing , ask around and make a point to understand their business model and how they provide their services to you.

With offshoring, the sheer distance often means that the work performed is done in a time zone 12 hours away. In another word, while the management works here, often the workers are asleep and when they are working, it's night time here in the US. This means that coordination of work handoff and management review needs to be carefully thought about and designed. A second consequence is communication charges involved with long distance work coordination, although new technologies such as Voice over IP, which are significantly cheaper than the old phone line, are reducing the full impact.