Advantages and Disadvantages of Outsourcing

However, there needs to be serious analyses done to determine the correct action to take. Financially, many outsourcing deals make sense. Furthermore, it gives businesses an opportunity to have business segments performed by professionals or in a much more efficient fashion; if the proper workforce or operational procedures are not in place. In a small business, I believe that outsourcing is a great way to have complex or strategic roles filled within an organization. Additionally, the customer base is smaller and allows the small business to still interact intimately with each customer. However, for a large business, outsourcing may create holes within the organization that makes them vulnerable. Specifically thinking about customer service roles, Vitthal Gore (2013) talks about the emergence of call center or Business Process Outsourcing (BPO). As the 21st century begins to impact the globe, many countries are being targeted for their people as the new-age workforce (Gore, 2013). Additionally, Gore notes as more people become competent in the English language, the easier it is for a business to tap into the untouched workforces of the East. While many times cheaper for companies to outsource their customer-service segments, many Americans expect a high-level of service from their provider, and as such, some of those quality controls may be lost in a total outsourcing (Gore,

In general, the outsourcing is hiring the foreign workers/company to do a particular task, as opposed to hiring domestic workers/company. Besides the outsourcing, the international purchase is an essential activity of companies. In the trend of a booming global economy, a company only focuses on its core value and hire suppliers to supply the necessary product and service. The relationship between companies are complicated and interdependent.

It is a concept that has evolved from a manufacturing perspective to a strategic perspective, which views the concept as a way for organizations to focus and be more competitive. The basic premise of outsourcing is that a specialist organization can perform a particular service more efficiently than can internal operations because a specialist organization has an inherent advantage in producing and delivering a service. Superior technology, management skills, or economies of scale may contribute to this perception. The type of sourcing relationship depends on whether a long-term or short-term need exists. To save funds used for benefits for regular employees, temporary workers are hired. In this case, the organization (outsourcer) provides all necessary resources except the workers, who are provided by the vendor. For long-term services, the vendor has full responsibility for delivering the service; the outsourcer provides only a liaison.

Outsourcing has become an integral part of many organizations today. Outsourcing has its advantages and disadvantages that organizations will have to weigh to decide whether or not outsourcing is the best possible solution to their current problems and business operations. Outsourcing refers to the process of hiring external provider to operate on a business or organization function (Venture Outsource, 2012). In this case, two organizations or businesses enter a contract where there will be an exchange of services and payments. This paper will discuss the possible risks an organization may encounter in outsourcing in relation to the use of an external service

Outsourcing is a method used by many corporations in which their products are manufactured in foreign countries often for cheaper labor.This method method of productions has it’s pros and cons.

Outsourcing is that a product or service provided by outside vendors which but was previously provided internally or that could be provided internally(Pearlson, 2001).It is an effective approach for information system implement in a business organization but a risky one.

Outsourcing is when a company purchases products or services from an outside supplier rather than performing the same work within its own facilities, in order to cut costs. In other words, outsourcing is an organization's contractual relationship with a specialized outside service provider for work traditionally done internally by that organization. The decision to outsource is a major strategic one for most companies because it involves weighing the potential cost saving against the consequences of a loss in control over the product or service. Some common examples of outsourcing include manufacturing of components, computer programming services, tax compliance and other accounting functions, as well as payroll and other

Outsourcing is a process of a company obtaining the services from an outside vendor. These services can be of different forms like IT services for a software company, voice services for a customer support industry, legal services for companies and small part suppliers for manufacturing companies etc. The main reason for a company to outsource its services is cost savings

In analyzing the second reason listed for why outsourcing is used; ‘inability to attract the highest caliber of employees to job functions that may be peripheral to the organization’s core discipline’, companies employ a different kind of outsourcing tactic. This reason leads to offshore outsourcing solutions. If a company cannot attract high caliber domestic employees to job functions secondary to their main function then they seek help where labor may be less expensive and more efficient.

This issue facing my organization is outsourcing. Outsourcing, the corporate buzzword of the nineteen-nineties through today, is a popular business approach utilized by companies focused on lowering their cost structure, gain entrance to new markets, and expand and build capabilities. Defined as, the strategic use of outside resources to perform activities traditionally handled by internal staff and resources [Handfleld, R, 2006]. Initially, outsourcing targeted non-critical and non-core activities such as facility maintenance and cleaning and security. Later the industry focus began to include the core processes of manufacturing, logistics, and back office support functions. In my experience, the term outsourcing strikes fear into the minds of employees and managers and represents dollar signs to executives and investors. Open communication during change is critical and to eliminate disconnects and misunderstandings. The objective of this paper is to describe both sides, delve into the communication middle ground, and expose the avoidable hidden costs that exist and provide possible solutions to reduce or avoid these hidden costs in value, human capital, and knowledge.

“Outsourcing refers to the contracting or subcontracting of noncore activities to free up cash, personnel, time, and facilities for activities in which a company holds competitive advantage”(Barlow, 2012). Outsourcing contributes speed to the operations within a business, gives a business the freedom of choosing the best possible supplier applicable to their business and also requires less of an effort from the management sector. The majority of businesses outsource in order to get jobs done quicker and more efficiently [comma] which is solved by hiring a specialist instead of giving your particular business the training and skills necessary to tackle the job at hand. For example, Apple outsources thousands of manufacturing jobs to countries like China, Korea in order to save time and money.

First advantage of outsourcing is that the organization is in the position to ensure that it is able to complete its activities in a swift and expert manner. Second advantage of outsourcing is that it helps organization to concentrate on core process instead of supporting processes carried out by it. Third advantage of outsourcing is that the organization will be in the position to ensure that it is engaged in activities of risk sharing over a period of time (Carroll, 2007). First disadvantage of outsourcing is that the organization will have risk of exposing confidential data. Second disadvantage of outsourcing is that it can cause some problem to

In the past decade the topic of outsourcing has become a heavily debated subject on if it is ethically correct to outsourcing jobs to foreign countries. Outsourcing has become more and more an option for many companies and not just an economic fad. The decision to outsource is a difficult one for any company to make because there are many advantages and disadvantages to consider. The decision to outsource affects many people, communities, and industries so if a corporation decides to outsource they must consider how it will affect human dignity, the common good of the economy, and subsidiary.

According to a research, many companies feel that the cons outweigh the pros and that this type of business practice should not be considered anymore. It also can give the persona that a company is trying to cut corners and costs, which in turn, can look cheap. It can take away from the essence of the feel of a company. People want the special touch and do not want to be another face in the crowd. Outsourcing adds more distance between the guest and the

Because of the important relationship between insourcing/outsourcing and competitiveness, organizations must consider many variables when considering an insourcing/outsourcing decision. This may include a detailed examination of a firm’s competency and costs, along with quality, delivery, technology, responsiveness, and continuous improvement requirements. Because of