Before we come to Pros and Cons of outsourcing let’s first try to understand what actually is outsourcing? Outsourcing means sharing some of your work with the outside parties. It is mainly through separating a particular unit of the organization or hiring third party organization for that job. Now let’s look at its advantages or disadvantages.
1. Risk reduction: Outsourcing helps the organization in shifting responsibility towards the third party. In a customer service risk of data loss is very high which when shared with the third party is reduced to a significant extent.
2. Cost Control: The operational and recruitment costs are reduced to a large extent.
3. Focus on other issues: When customer service is outsourced the management can focus more on other major issues in hand.
4. Swiftness: The work can be carried on more swiftly when it is outsourced as expertise is present in that particular organization regarding that work.
1. Choice of right party: If the work is outsourced to a party which is not an expert in that particular field then it can affect the image of the organization in a big way. So the outsourcing partner should be chosen with care.
2. Sharing of confidential data: When the work is outsourced, some of the confidential data of the organization is also shared with the third party which may prove to be risky for the organization.
3. Customer focus: The customer focus of the outsourcing partner may not be that high if that particular work is carried on by the organization it-self.
4. Other issues: There are other problems concerned with outsourcing which include the lack of securing levels in the outsourcing level or untrained staff or legal costs in an agreement.
But all these cons can become pros if outsourcing partner is selected with utmost care.