Outsourcing: Pros and Cons
Companies all over the world have been outsourcing their business processes for many years. The outsourcing trend has been growing significantly and even North Korean companies are contracted by organizations located in different parts of the world.
The practice consists of companies specialized in a range of technical processes that provide their clients with services that would cost them too much if done in-house. This is a profitable option for both sides involved in the process. Outsourcing will further grow in the coming years and this may be the right time to find out more about the advantages and disadvantages of this industry.
Pros of outsourcing
Controlled costs. This is about business processes that you can’t avoid and that cost less when being performed by an experienced contractor. When hiring another company to do one or more business processes for your organization, you get rid of costs and time spend on recruitment, training, employee benefits, office space for a bigger team, infrastructure, and technology.
It also helps to reduce workload. At the same time, that capital can be invested in other departments of the organization.
More talent available. If you keep specific business processes in-house, you will depend on the local talent pool. When you decide to delegate those processes to another company you benefit in two ways.
First, contracted companies have their experienced staff that specializes in the given services. They know what they’re doing. Secondly, you’ll shift from the local talent pool that is hunted by every other company based in the area to global talent options.
Fast start. If you’ll build that new department in-house, the new team will take its time to get used to the workplace and to each other. In the meantime, an outsourcing partner does not need that. The team is there ready to get started and convert a new project into a product or service.
Time zone. This element is relative. There are many people that consider it a disadvantage. It does not provide the same output for different companies. Depending on the area you can get the job done when your business hours are finished and find it ready the next morning.
Extra benefit: your partner may question your way of doing things and share a more efficient solution instead
Cons of Outsourcing
Language lost in translation. Language can turn into a barrier and cause of misinterpretation. Make sure to find a partner with excellent language skills and also a channel that allows making questions and clarifications.
Confidential data misuse. In a few cases, there’s the risk of getting confidential data exposure. Make sure to find a reliable and professional partner.
Decreased customer care satisfaction. When you outsource call centers or contact centers to another country it may happen to notice a decline in customer satisfaction. This is why you should always pick the right partner or outsourcing destination. In the case of call centers language skills are crucial.
Call centers surged in India due to the English speaking skills. In the meantime, countries like Italy have outsourced their call centers to Albania where the people speak Italian like native speakers and are known for their excellent multilingual skills.