Outsourcing’s a bit of a hot button issue, isn’t it? But, it’s a necessity that many businesses rely on to save money, among other things.
When most people think of outsourcing, they think about businesses contracting out their business matters to overseas workers, decidedly taking jobs away from domestic workers that do need the work.
Of course, the main issue with outsourcing is that many often assume that businesses do outsource to pay their workers less. While business do outsource to save costs, assuming that particular issue is, perhaps, what many would say ‘jumping to a conclusion.’
But, we’re not here to debate the ethics of outsourcing—we’re just merely providing some information about how outsourcing works. And, of course, the pros and cons of the matter.
The Basics of Outsourcing
According to most industry definitions, outsourcing involves contracting a business process to another outside party, generally to have the work completed on a certain time schedule or for other business related conveniences.
Businesses often outsource work to overseas parties for various reasons, but many are instead choosing to outsource their business processes to domestic based workers. Let’s take a closer look at both:
Domestic outsourcing involves contracting workers located in the business’ city of operation or in their country of operation. Although domestic workers are situated closer to the hiring business, they can be considered more expensive due to various factors.
Foreign outsourcing involves contracting workers located in other places around the world. This is generally done via the web, where foreign workers are required to report back to the business with their completed work. Foreign outsourcing is considered cheaper than domestic outsourcing, but it’s often subject to ‘getting what you paid for,’ as they say.
The web’s also changed the scope of outsourcing. Instead of having to travel to workers, a business can merely contact workers via their web-based network and send the work to them. This allows businesses to outsource to workers located anywhere in the world.
Naturally, that makes outsourcing one of the most flexible operations out there. It essentially gives businesses far more control over their allotted budgets and pretty much keeps them from expending too many funds or resources on hiring out extra workers ‘back at home.’
That’s the reason why many businesses choose to outsource work to virtual assistants and the like to save on costs from hiring an in-person secretary—to provide an example.
Many industries have embraced outsourcing for various purposes, especially in recent times where it’s more or less the best option. However, it doesn’t mean that outsourcing is the best option. The following section will explain why outsourcing may work for some companies, but be completely disadvantageous for others.
There’s a reason why many businesses embrace outsourcing—several reasons, in fact. Technology, among other things, has made outsourcing much more easier than it was in the past.
1. Improved company revenue and return on investment. Provided a company outsources work to a skilled pool of workers, they can potentially maximize their business revenue and, eventually make back their return on investment.
2. Decrease the cost of labor. Outsourcing, although controversially, can significantly lower the cost of labor for many businesses.
3. Reliance on skilled and knowledgeable workers. Sometimes, it’s the workers who can help streamline business processes on their own, helping business operators learn more about how to practice such streamlined processes on their own.
4. Frees up valuable business management time. Outsourcing is commonly relied upon to help free up daily routines that could better be served to actually running a business.
5. Boosts speed and quality of delivered business processes. Again, it’s all about hiring out to skilled workers—provided a business operator can tap into workers of good skill levels, they’ll be able to boost the delivery speed and quality of their outsourced processes.
It’s no secret that outsourcing’s often associated with poor quality work. But, it’s not the only reason why some might feel weary about outsourcing.
1. Probable loss of control of business resources. Sometimes, outsourcing causes a business operator to lose control over their outsourced resources, especially if it’s poorly managed.
2. Problems with quality and turnaround. Outsourcing, especially through the web, is commonly associated with poor quality and longer than usual turnaround time.
3. Issues with ‘language barriers.’ Some businesses struggle with smoothing out language barriers involved with their outsourcing processes, often caused by outsourcing work to overseas workers.
4. Lowered expectations for results and benefits. Many issues without sourcing often causes outside parties to look down upon a business for failing to deliver quality work.
Outsourcing, as a practice, certainly isn’t for every company. But, for some companies, it’s a means to get work efficiently completed when they lack the resources to do so. All in all, the controversy of outsourcing doesn’t outweigh the fact that many businesses do appreciate it for what it provides them.