8 Advantages and Disadvantages of Outsourcing
Outsourcing refers to an agreement where one company hires another company which is responsible for the internal activity of a company. Most of the companies outsourced the services which help them in glowing.
As it is rightly said:
“Master your strength, outsource your weakness” — Ryan Khan
Below are some of the advantages and disadvantages of outsourcing –
Advantages
1: Cost Reduction
It helps us to reduce the cost because when company outsource another company, the company which outsources will not manufacture the product but take the product which is already manufactured by another company so it helps us in cost reduction of the company.
2: Quality Product
A quality product is always required. So it is the duty of the company to focus more on the quality of a product which helps them to gain more customer satisfaction. The company should give more attention to the quality of a product.
3: Things get done fast
It is one of the best reason why a company outsource because outsourcing helps us to do the work fast. If we are working with a fewer number of members of staff then it helps us to do the work quickly within the given time limit.
4: Get More Experts
Outsourcing also helps us to get more experts who are perfect at work. By outsourcing task, it helps the company to sustain and improve its performance by getting the help of experts in different fields.
5: Build Relationships
Outsourcing helps us to improve the relationships between companies. When one company work with another company it helps us to build a good relationship between the companies. So it is considered to be the best advantages of outsourcing.
6: Share Risk
When one company outsource with another company it helps them to share risk. If any risk arises both the companies can work together to overcome it. So outsourcing also plays a very important role in sharing risk.
7: Improve Financial Position
Outsourcing helps companies in improving their financial position whenever required. If any problem arises both companies can work together and help each other in order to improve their financial position.
8: Technology
When one company outsource another companies technology of both the companies can be through which work can be done easily and quickly. So technology also plays a very important role in outsourcing companies.
Disadvantages
1: Misuse of Information
When one company have an agreement with another company then there is a chance of misuse of information by the third party which can be a great loss for the company.
2: Compromise of Quality
When we outsource then there may be a chance of quality differ because what quality we are accepting we are not getting so here we have to compromise.
3: Ignore Ethical Issues
Company forget about the ethical issues at the time of doing business because they focus more on profit because the goal of every business is to earn more profit.
4: Poor Quality
Sometimes the quality may be poor due to outsourcing because the company which the other company do not manufacture the product but getting take the product which is manufactured by another company. So there may be a chance of poor quality.
5: Things Get Lost in Translation
Sometimes there may be a chance that things may be lost in translation such as email, important instructions etc. It can be due to a short time.
6: May Face Moral Dilemmas
Sometimes the company may also have to face moral dilemmas just due to another company with whom it outsourced, which can create a great impact on the growth of a company.
7: Dependency
Dependency is also one of the major disadvantages of outsourcing. Some time due to an agreement between two companies, one company have to depend on another company related to any decision, product manufacturing etc.
8: New Challenges to be faced
The company have to face many new challenges due to the agreement between the companies. So it is also considered to be the major disadvantages of outsourcing.
-Krati Porwal
