Advantages to Outsourcing vs. The Disadvantages

Benefits of Outsourcing

In business operations, a topic that keeps coming to the forefront is outsourcing. Figuring out which components will be outsourced versus which stay within the company can be a difficult decision and making the wrong one could be more financially damaging than anything else. When facing the question of whether to outsource or not, it can be beneficial to lay everything out in black and white. What are the advantages to outsourcing vs. the disadvantages?

Advantages to Outsourcing

Outsourcing offers the ability to maintain focus on one particular activity. Say for instance, your marketing team has done an awesome job and has gained a lot more consumers to buy your product, your accounting and customer service departments may need help during this time of influx. Outsourcing your accounting may not be a bad idea, this way you can focus on customer satisfaction.

Efficiency is also an advantage. Instead of paying a specialist(s) a full salary within your company to handle IT work, you can outsource the work when you need it to a company that employs only specialists in the area you need.
Generally speaking, overhead costs of back office functions are extremely high. If you are able to outsource these particular functions, the company will see a great reduction in overhead costs and out-of-pocket expenses.

The flexibility outsourcing allows seems to be one of the greatest benefits. A companywide decision can be made about how or when they may outsource. Maybe during busy holidays seasons, possibly during tax season – this is all dependent upon what sort of business is being run. Outsourcing allows one to bring on ‘additional helpers’, but only when it is needed, rather than adding more people onto the payroll.

There are also some disadvantages to outsourcing, but it pales in comparison to the advantages. The number one disadvantage when looking at everything is that the company may actually lose some of its control over a particular area. If you outsource your payroll, you no longer have the ability to go and speak with the payroll office within the building and make some slight changes. It now becomes a process in contacting your outsourcing company and trying to narrow down the issue. Security and confidentiality may be an issue as well. It is important to think about which particular areas you would like to outsource before making the decision.

Sources:

TCN Blog
operationstech.about.com