Pros and Cons of Outsourcing

The term outsourcing has widely spread in America. Outsourcing is not for use in manufacturing only because it is possible to connect with a person in another nation on customer care line. However, popularity does not mean you should always go for outsourcing. Outsourcing has its cons and pros as explained in this article.

Outsourcing is helpful since it helps one to cut labor costs. Among the core factors that determine the price at which a commodity is sold is the cost of labor. Companies set prices of products in line with the much they spend on their people. 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 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 has an interest in offering customer support in-house; employees have to remain active the entire day a whole week as suggested on this website. Employees who work at mid-night get disorders such as insomnia, difficulty with personal relationships, difficulty in concentrating, irritability, lack of energy, and insufficient sleep. However, if someone in India answers customer service at midnight, it is day time for them. In fact, a number of IT providers outsource to each time zone to increase the time they provide services.

It is disadvantageous to subcontract because you are not able to control quality. When everything is performed in-house, walking around can help you to do a quality check. 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.

It is disadvantageous to outsource because it lowers staff morale. Company morale is at stake when workers feel they are not secure with their jobs. Upon starting to outsource different services overseas, the remaining employees begin to feel insecure. They tense and start looking for greener pastures.

Cultural barriers disadvantage outsourcing. 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 your cultural values and those of the business you outsource differ, business priorities will be different and problems are likely to occur. Language barrier also creates frustrations among customers and service providers.