Pros and Cons of Outsourcing
The term outsourcing has widely spread in America. Outsourcing is not limited to manufacturing since it is possible to get customer support from people in other states. However, being popular is not an indicator of outsourcing being an all-time option. Outsourcing has its good and bad sides as the article below explains.
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 determine their prices in relation to the amount they pay its people. America has a higher cost of living, making factories to spend a lot in wages. However, India and China’s cost of living is lower and you can pay employees less and meet their needs. This lowers the cost of manufacturing hence able to offer, allowing them to offer products at a competitive price. You can click here for more information about outsourcing.
It is helpful to outsource because it avails more hours. 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.
When you outsource, you are disadvantaged since you have less quality control. When your company does everything in-house, you can perform the quality check by walking around. Outsourcing from a different country makes it tough to control quality. Therefore, issues can be taking place for weeks only for you to notice them as customers complain or you decide to fly overseas to see the progress. Know more about outsourcing here!
It is not advisable to outsource as this lowers employee morale. Company morale is at stake when workers feel they are not secure with their jobs. When you begin to outsource various services overseas, the other staffs start to feel insecure. The staffs tense and embark on the search for better jobs.
Outsourcing has shortcomings due to cultural barriers. Different parts of the world have value systems that differ and what a region accepts may be unacceptable in a different region. In case you outsource a company whose cultural values vary from your company’s, they will have business priorities that differ, thus causing chaos. Language barrier also creates frustrations among customers and service providers.