#8 Mendiola St. Manila
School of Business and Accountancy
The Advantages and Disadvantages of Human Outsourcing
John Albert P. Corpuz
Krista Nina C. Datu
Kenneth L. Gloria
Mark Anthony M. Go
Jervy S. Sanchez
Maria Victoria C. Semsem
December 20, 2012
In our present day situation, many things are really fast changing not only the technology that we are using but also the things that constitute our daily living, and to be specific, the businesses that dominates our world today- the corporate world. By change, we mean to say the principles and standards that every company is using in order to sustain not only what they have established but also their names in the vicious world of market and corporate competition. To be able to cope, no company has the ability to boost its development and growth without the aid of other companies. There has been a long list of different strategies that companies adopt and apply in their daily dispositions, but not all of them are applicable to all the companies, as to the case of contingencies. Many tactics and strategies adopted from every situations that occurred in the past that were proven to be useful enough, but still, these strategies should also come and go with the changing environment, thus, this study focuses to these newly arising “needs”, to be specific, those that can affect the core of the company, which served as the engine, so that the company will run efficiently and effectively - the Management. And one of these fast rising elements of the economy is the so called Human Outsourcing or Outsourcing. Over the years, outsourcing has been a useful tool not only locally but also internationally. It did help many group of companies reached what they are now. Outsourcing has been defined as a technique used by certain companies in covering their management distress by seeking the services of other companies to fill certain positions in their organizational structure. They usually get these services with the help of manpower agencies and expectedly with a corresponding fee. Domestic and International companies have applied this type of practical solution in aid of distress. But now, the problem lies on the analysis of such course of action as to its effectiveness and reliability because every action that the company make, has to pass through certain considerations. As to what it needs to accept and give up: Its Advantages and Disadvantages.
Advantages of Outsourcing
There can be significant cost savings when a business function is outsourced. Employee compensation costs, office space expenses and other costs associated with providing a work space or manufacturing setup are eliminated and free up resources for other purposes.
Focus On Core Business
Outsourcing allows organization to focus on their expertise and core business. When organizations go outside their expertise, they get into business functions and processes that they may not be as knowledgeable about and could potentially take away from their main focus. An example of this is when a grocery store decides to add video rental to their operation. If too much focus is put on that part of the business they lose focus of the core business which is grocery.
Improved quality can be achieved by using vendors with more expertise and more specialized processes. An example of this would be contracting out a cleaning service. An outside service would have the resources for hiring, proper training and facility inspections that may not be available if the function were kept in-house.
The advantage of having a vendor contract is they are bound to certain levels of service and quality. An example of this is if your IT function is outsourced and the technician calls in sick, it is the vendor’s responsibility to find someone to replace them and meet your support needs.