Benefits and Shortcomings of Outsourcing
The term outsourcing has increased in popularity in America. Outsourcing is not exclusively for manufacturing because you can get someone from a different nation on the customer support line. However, being popular is not an indicator of outsourcing being an all-time option. Outsourcing has its cons and pros as explained in this article.
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. Prices at which companies do offer their products are determined by the much its labor costs. America has a higher cost of living, making factories to spend a lot in wages. However, the cost of living in China and India, meaning employees can receive lower wages and be in a position to cater for their expenses. This makes the cost at which factories manufacture to be low, enabling them to sell their products at prices that are competitive.
It is advisable that you outsource because more hours are created. While there are 40 working hours a week for the Americans, time is not a concern when technical issues are concerned. If this company wants to provide customer support in-house, its offices would need staffs to work 24/7, meaning you could operate with a three-shift program. 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. However, people answering this service in India at midnight will have no issues because it is day time in India. As a matter of fact, some IT companies subcontract services to all time zones to maximize the time they offer services.
Outsourcing is disadvantaged in that there is less quality control. When everything is performed in-house, walking around can help you to do a quality check. When you outsource from another company, you will not find it hard to control quality. Therefore, issues can repeat themselves many weeks only to come to your notice when clients complain or you board an overseas flight to look at what is going on.
It is disadvantageous to outsource because it lowers staff 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. They tense and start looking for greener pastures.
Outsourcing has shortcomings due to cultural barriers. Value systems differ slightly in different parts of the world and what is acceptable in a region may be a taboo to another. If the outsourced company does not have the same cultural values as your business, they may have different business priorities hence causing problems. A language barrier also brings about frustrations among clients and service providers.