Outsourcing
refers to a company that contracts with another company to provide services
that might otherwise be performed by in-house employees. Many large companies
now outsource jobs such as call center
services, e-mail services, and payroll. These jobs are
handled by separate companies that specialize in each service, and are often
located overseas.
There
are many reasons that companies outsource various jobs, but the most prominent
advantage seems to be the fact that it often saves money. Many of the companies
that provide outsourcing
services are able to do the work for considerably less money, as they don't
have to provide benefits to their workers and have fewer overhead
expenses to worry about.
Outsourcing also allows companies to focus on other
business issues while having the details taken care of by outside experts. This
means that a large amount of resources and attention, which might fall on the
shoulders of management professionals, can be used for more important, broader
issues within the company. The specialized company that handles the outsourced
work is often streamlined, and often has world-class capabilities and access to
new technology that a company couldn't afford to buy on their own. Plus, if a
company is looking to expand, outsourcing is a cost-effective way to start
building foundations in other countries.
There are some disadvantages to
outsourcing as well. One of these is that outsourcing often eliminates direct
communication between a company and its clients. This prevents a company from
building solid relationships with their customers, and often leads to
dissatisfaction on one or both sides. There is also the danger of not being
able to control some aspects of the company, as outsourcing may lead to delayed
communications and project implementation. Any sensitive information is more
vulnerable, and a company may become very dependent upon its outsource
providers, which could lead to problems should the outsource provider back out
on their contract suddenly.
While outsourcing may prove highly beneficial for many
companies, it also has many drawbacks. It is important that each individual
company accurately assess their needs to determine if outsourcing is a viable
option.