Pros and Cons 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.
You will benefit by outsourcing because it lowers labor costs. One of the major factors that influence the amount you pay for this product is the much labor costs. 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 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. In case a company is interested in providing customer support in-house; staffs have to be in offices the whole day all week. Employees working at midnight might develop issues like irritability, insomnia, difficulty with personal relationships, insufficient sleep, lack of energy, and difficulty in concentrating. However, if someone in India answers customer service at midnight, it is day time for them. As a matter of fact, some IT companies subcontract services to all time zones to maximize the time they offer services.
It is disadvantageous to subcontract because you are not able to control quality. When your company does everything in-house, you can perform the quality check by walking around. Outsourcing from a different country makes 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.
Outsourcing is disadvantageous in that is lowers the morale of employees. Company morale is at stake when workers feel they are not secure with their jobs. Upon starting to outsource different services overseas, the remaining employees begin to feel insecure. They tense and begin to search for greener pastures.
Outsourcing is disadvantaged by 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. In case your cultural values and those of the business you outsource differ, business priorities will be different and problems are likely to occur. Also, language barrier brings about frustrations among service providers and customers.