Pros and Cons 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.
You will benefit by outsourcing because it lowers 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, 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 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, people answering this service in India at midnight will have no issues because it is day time in India. As a matter of fact, some IT companies subcontract services to all time zones to maximize the time they offer 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. When you outsource from another company, you will not find 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. 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 slightly differ in various parts of the world, making what a region sees acceptable to be a taboo in another region. In case your cultural values and those of the business you outsource differ, business priorities will be different and problems are likely to occur. A language barrier also brings about frustrations among clients and service providers.