The Pros and Cons of Outsourcing and How to Stay On the Right Side


Outsourcing is a common practice for most businesses, but most of them plunge blindly into this fad without determining whether they really need to outsource and without weighing the consequences. Companies that have successfully incorporated outsourcing as a part of their business strategy are those who have followed the basic ground rule of outsourcing – ‘Don’t buy the solution that seems most capable. Instead, buy the one that will allow you to do it your own way.’

The Positives and the Negatives

Outsourcing can be one of the most effective and simple solutions for business improvement. It can often be a cost-effective way to improve your performance in those business areas where you are not an expert and do not aim to be one. They may, however, prove dreadful for process improvement in a business simply because a business does not control an outsourced process.

The most often discussed advantages of outsourcing are connected with improved financial performance and various non-financial performance effects, such as a sharp focus on core competencies. In fact, many believe that outsourcing will remain one of the strongest and most sustained trends in business over the next decade and beyond, if the expected benefits are realized.

While there are many obvious and proven advantages of outsourcing, the process also comes with many risks, some of which can be quite considerable and affect the functioning and profitability of the company severely.

Losing Control Over Key Areas of Business May Be Tough to Accept

An organization using outsourcing almost certainly loses a fair degree of control over its future and given over into the hands of another firm, whose primary motivation is the maximization of its own profits. A firm must know all the present risks and future threats they may be exposed to for taking advantage of all the potential benefits of outsourcing.

For this to happen, a certain amount of trust must be placed in the service provider, and know well its possibilities and potential. It becomes extremely important for the outsourcing organization to retain close control over all strategic activities and functions.

Keep As Close as Possible to the Ground Rules of Outsourcing

Coming back to the basic ground rule of outsourcing, it may seem pretty simple to implement but it is not. In fact, it can be very difficult. Companies looking at outsourcing as a business solution often get excessively excited about the vast capabilities and money-saving projections. They forget that they might be looking at capabilities they don’t need while the focus should be firmly only on the ones they need. In addition, the projections generally do not include all the wastage and dissatisfaction that comes with being forced to do something someone else’s way, by putting aside your own capabilities and talent.

Outsourcing has become more than a standard practice across many industries. There are specialists who can do things better than we can. Unfortunately, many times their ways and methods may not be right or convenient for your business. The best way to solve this problem is to seek the experts that are willing to do custom and minimal solutions exclusively for you and on a long-term basis. Indisputably, the price tag will be higher, but the unpleasant experience and waste, both unexpected and unpredicted, will be far less.

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