Outsourcing Help: Pros and Cons of Outsourcing

BENEFITS OF OUTSOURCING

Cost

Cost is the primary reason why companies turn to outsourcing. Outsourcing eliminates fixed costs almost completely, together with the high initial capital outlay needed to fund new departments and the periodic costs of maintaining them. There will also be no costs related to idle capacity as you can adjust your workforce anytime you want, reducing or increasing it at your will. Also, outsourced workforce is cheaper than a workforce from developed countries.

Time

Another great benefit of outsourcing is its speed. Outsourcing companies can put together a workforce of qualified professionals tailor fit to your needs in no time. Outsourcing eliminates the rigorous process of hiring individuals for your new task force. Also, your obligation to an outsourced workforce ends upon completion of the undertaking. Unlike if you form a new workforce in which you will have to pay the workforce continuously even in times when their services are not needed.

Skills

An outsourcing company can provide your company with skills that you currently do not possess. Typical example is when a company needs to utilize a certain technology in does not at the time understand, it resort to outsourcing a workforce that has the skills it requires. It is faster and less costly than training your own employee to gain the said skills.

Empowerment

Because your outsourced workforce will be doing the dirty work, the individuals in your company can now focus on more core competencies and developing their craft. They can concentrate on higher tasks. They will thus become more efficient in leading your company towards attainment of its goal.

CONS OF OUTSOURCING

Need of Constant Management

The most frequent reason why outsourced projects fail is the lack of constant and proper management. A good manager is vital in the success of outsourced projects. You need an active manager that will maintain constant contact with the outsource provider. The leader should fully understand the company's demand of the outsourced workforce and should ensure that the provider is also always updated about these demands. The manager should make sure everything is kept under control and all is under his oversight.

Increased Frustration

Several factors brought about by outsourcing can cause immense frustration on the company. The first factor is the time difference. There is usually around a half day differential between the company and the outsource provider. This may cause difficulties in communication. Like for example, a question may be raised on Sunday, answered on Monday, reply requested on Tuesday, and a response received on Wednesday. The difficulties however can be greatly reduced by scheduling periodic meetings like once a week for example. If ever a far difficult problem arises, it may be solved by conducting extra meetings. A decent and professional outsource provider will surely understand the necessity for good, timely and constant communication and will surely be willing to meet with your schedule.

Another problem that may arise is unsatisfactory quality. There are some outsource providers that willingly sacrifice the quality of their services for more profit. The low quality of the services provided by the outsource company will definitely be a problem. These can be solved by getting all those who can help involved. Code reviews should be done regularly and make sure everyone, including the outsource provider adheres. Complacency will result to poor and non-maintainable products that will just add to your troubles.

Employees may also make the outsource provider their scapegoat whenever they do something wrong. Some employees will tend to take advantage of opportunities to pass the blame to the provider. This may cause miscommunication and disagreements between you and the provider. To solve the problem the employees should be empowered. Encourage them that the company is willing to teach employees who commit mistakes ways to avoid making the same mistakes over again. Ask them to try and work problems out with their respective department.

More Difficult Testing

Generally, testing an outsourced product is difficult in the sense that whenever a problem is discovered, the findings have to be communicated to the outsource provider. This could be a problem especially if the provider cannot reproduce the problem, therefore, will find difficulty in coming out with solutions. Having two different machines, the one use by the company and the one used by the provider, may cause test results not to match. This can be eased by exchanging information about both equipments used to produce the product to be able to trace the possible sources of the difference in quality.

Morale Degradation

Choosing to outsource a project instead of generating it internally can adversely affect company morale. Employees could see this as a threat to their jobs. This matter should be cleared as soon as possible to avoid internal havoc and confusion. If their jobs really are at risk, then the employees should be notified right away to mitigate the spread of bad morale. On the other hand, if jobs aren't really threatened, the employees should be assured that their jobs are safe. It should be made clear that the outsourcing will even pave the way for employees to escalate their working capabilities.

Take time to research and you will find that there are many companies out there willing to provide you with outsourcing help.

To help clear things on outsourcing out, CallComLeads is always happy to be of service.