Outsourcing Advantages And Disadvantages Essay

Introduction: Outsourcing is the transfer of a company’s internal business activities to an outside source. The need for efficiency and reduction of operational cost is the reason why companies outsource.

As a result, organizations have given out their activities to enhance productivity.  Outsourcing has been rated as one of the most ancient business ideas.

Small and big businesses are gradually embracing the act. The outsourcing process is also a way of changing the traditional way of doing things in companies.

Outsourcing Essay

In some organizations, employees have been turned into external suppliers. In most cases, there is no option for them since they stand to lose their jobs.

This has seen it cause damage as much as it benefits the company. This act also changes the process of doing things in organizations. This paper will explore the advantages and disadvantages of outsourcing.

outsourcing advantages and disadvantages essay

outsourcing essay

This does not only apply to organizations but also government institutions. There has been a great crash between employees, leaders, and business owners.

This is because outsourcing to bosses is a great way of being efficient. On the other hand, employees take it as a threat to their employment terms and conditions.

Advantages of Outsourcing

Focus on better opportunities

When a company is growing, it is exposed to several opportunities. If the opportunities are demanding, then they can take a hold on its resources and workers.

This might lead to the negligence of the goal that led to the formation of the company. If the company considers outsourcing in such a situation, they will focus on the opportunities and main agenda. This further translates to growth and profit.

Control of operations

Sometimes organizations have some departments that have a high cost of operations. At times you might realize this department doesn’t bring back many returns.

It would be a plus if the company’s management considered to our source some skilled personnel to run the department. This will not only cut the cost but also enable the company to control its operations with ease.

Risk sharing

Outsourcing is a way of bringing another company on board. This means that the contracting company will share the mandate of completing the assigned duties. They will also be part of any risk involved as they carry out their responsibility.

Develop internal employees

Sometimes your company can be contracted to offer services, and you lack skills in it. This demands that you bring a team of skilled people into your company to deliver the services on your behalf.

As your internal staff work with the outsourced team, they will acquire new skills, which will be a plus to your company. This is because if you get a similar contract, you will not need to outsource later on.

Disadvantages of Outsourcing

Hidden costs

As much as organizations consider outsourcing to be cheap, the truth is it comes with its costs. The costs are incurred when outsourcing agents sign long term agreements and charge more for it.

This is why reading the terms is critical; otherwise, you might be overcharged for services. Many companies have paid a fortune for these services unknowingly.

Security risk

Sometimes outsourcing is risking your customer’s data. This is more so if you are outsourcing services that deal with the data.

You could be putting your client’s privacy at risk by giving their data to other people. If you must involve the client’s data, then you must be cautious.

Loss of focus

It is very easy for one to lose their main focus once they outsource. This is because outsourcing agents can offer multiple services to your clients.

This increases the chances of sending services that have not been keenly attended to. The lack of proper attention could be a bomb in waiting for your company.

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Outsourcing has raised a lot of arguments in the recent past. Many companies have had unending battles with their employees because of this act’s effect on their working conditions.

There are many benefits of outsourcing that a company gets to enjoy. Increased productivity and growth are the main advantages. However, there is also the downside of this act.

The above discussed are some advantages and disadvantages of outsourcing. Any organization should weigh both sides before outsourcing.

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