Advantages and Disadvantages of Outsourcing
Outsourcing | Operations Management
Management Notes
Outsourcing is the process of contracting an external party for moving some of the firm’s internal activities and decision making responsibility to outsiders.From the American Glossary, the concept of outsourcing has came ie;’outside resourcing’. Outsourcing sometimes involves transferring employees and assets from one firm to another, but not always.Outsourcing is also the practice of handing over control of public services to private enterprise.
| S.No. | Advantages Of Outsourcing | Disadvantages Of Outsourcing |
| 1. | Outsourcing helps to save the significant costs particularly for labor and also the overhead costs. | Outsourcing increases the risk of losing sensitive data and the loss of confidentiality while for outsourcing processes like payroll, medical transcriptions and insurance information. |
| 2. | Outsourcing helps in gaining outside expertise which can be a good source of innovation for improving products, processes and services. | Outsourcing can lead to loss of management control of business functions which mean that you may no longer be able to control operations of activities that you outsource. |
| 3. | Outsourcing gives business flexibility in staffing, manpower management, helps you save costs and can also pick the best people to run your core functions. | Conflict can arise between the employees in doing the work since the different participants do not share the same values, priorities, and culture as they come from different organizations. |
| 4. | Outsourcing helps to get the work done faster which may allow the firm outsourcing to win orders by more quickly introducing new product and services. | There may arise the problem of quality if the outsourcing provider doesn’t have proper processes and/ or is inexperienced in working in an outsourcing relationship. |
| 5. | Outsourcing helps you to get peace of mind as you outsource with a reliable individual or agency which handles the tasks expertly and efficiently without you having to worry or lift a finger. | Outsourcing can create hidden costs and legal problems if the outsourcing terms and conditions are not clearly defined. |
Read this also:
Difference between Manufacturing Concerns and Service Concerns | Operation Management- Principles of Marketing – Old Question Paper 2006 | Semester: Fall
- Motives of Holding Cash – Cash Management | Financial Management
- Different Stages of Technological Innovation – Management of Technology | Management Notes
- Principles of Marketing – Old Question Paper 2007 | Semester: Fall
- Managerial Versus Entrepreneurial Decision making – Fundamentals of Entrepreneurship | Management Notes
Fantastic items from you, man. I’ve remember your stuff
prior to and you are just too fantastic. I actually like what you have bought
right here, really like what you are saying and the best way wherein you
are saying it. You are making it enjoyable and you continue to care for to stay
it sensible. I can’t wait to read far more from you. This is actually
a wonderful website.