Globalization has transformed the whole IT business scenario and the way of doing business has changed a lot. There are no more limitations that were earlier imposed by geographical borders. This has increased the scope of global IT outsourcing whereby businesses contract out their back office tasks to BPO companies located in India, China, Malaysia, Philippines, Thailand, etc. to enjoy the benefits of outsourcing. It has been an asylum for many businesses and the phenomenon has immensely helped them in many ways. Some of the key pros and cons of outsourcing are explained below.
Pros and Cons of Outsourcing: Quick Overview
- What is outsourcing?
- What can be outsourced?
- Advantages of outsourcing
- Disadvantages of Outsourcing
- Final Thoughts
What is outsourcing?
Outsourcing is a business practice of hiring a specialized third-party agency to outsource certain business functions and services. It is beneficial for companies as it brings them value, expertise and reduces overhead costs.
Outsourcing is a common practice in industries that face labor shortage or the dearth of workers who possess specialized skills in specific domains. Outsourcing is also a solution for companies that look for cheap labor and want to increase the return on their investments.
What can be outsourced?
Any job can be outsourced.
However, most companies that opt for outsourcing choose to outsource those roles that are meant to support the central role of the company and to help it in the accomplishment of its strategic vision. Companies also outsource their day-to-day, repetitive works to other companies so as to de-clutter their schedule and focus on more important work.
The job sectors that are commonly benefited by outsourcing are Manufacturing, Distribution, Research & Development, IT Services, and Call Center support.
Top Advantages of Outsourcing
Top Disadvantages of Outsourcing
Although there are a number of reasons why outsourcing can prove beneficial for your business, there is always a possibility that it might not work as the best option in case of some situations. However, this can be avoided if you take the right decision while keeping a complete knowledge of the pros and cons of outsourcing.
Thus, by outsourcing, customer loyalty boosts, quality enhances, business values elevate and productivity and profits increase. So, your business keeps on growing.