Pros and Cons of Outsourcing
The popularity of the term outsourcing has increased in America. Outsourcing is not limited to manufacturing since it is possible to get customer support from people in other states. However, outsourcing being popular does not make it be the best always. Outsourcing has its cons and pros as explained in this article.
Outsourcing is advantageous because labor costs go down. One of the major factors that influence the amount you pay for this product is the much labor costs. Companies determine their prices in relation to the amount they pay its people. 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 lowers the cost of manufacturing hence able to offer, allowing them to offer products at a competitive price.
It is good to outsource because it creates more hours. 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. Employees who work at mid-night get disorders such as insomnia, difficulty with personal relationships, difficulty in concentrating, irritability, lack of energy, and insufficient sleep. For India, American midnight will be day time and it will not be a big deal for people responding to customer service at India. In fact, some IT providers outsource to numerous time zones to add the time services are available.
Outsourcing is disadvantaged in that there is less quality control. When your company does everything in-house, you can perform the quality check by walking around. When you outsource from another company, you will not find it hard to control quality. Therefore, issues can be taking place for weeks only for you to notice them as customers complain or you decide to fly overseas to see the progress.
Outsourcing is disadvantageous in that is lowers the morale of employees. When employees are not secure in their jobs, company morale gets damaged. Upon starting to outsource different services overseas, the remaining employees begin to feel insecure. The staffs tense and embark on the search for better jobs.
Outsourcing has shortcomings due to cultural barriers. Value systems slightly differ in various parts of the world, making what a region sees acceptable to be a taboo in another region. 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.