Introduction to Outsourcing Outsourcing is when a company uses another outside company to fulfill goods or services needed for their own company in order to cut costs. Also, it is usually practiced more successfully by larger companies and businesses. For example, one company may use another outside company for call services, email or pay roll because it is cheaper than for them to have an in-house department take care of these tasks. Today there are companies that exist for the sole purpose of performing the tasks that many other companies resort to outsourcing for. Although a good amount of outsourcing does occur in different countries, it is important to remember that not all outsourcing occurs in different countries. Outsourcing can definitely cut costs and give companies a competitive edge but it is not the best resource for every company or organization.
Disadvantages to Outsourcing As we have defined earlier outsourcing is the practice of sending out specific job functions or operations to an outside company or individual. Many companies use this method to help the growth of the business and to save money. These advantages aside there are several disadvantages that could seriously cripple a company. These disadvantages include loss of control, hidden costs, threat to security, quality of service, tying a company’s well-being to another, as well as the bad publicity it could lead to. One of the few disadvantages is the loss of managerial control. When outsourcing, a company is handing over a portion of their operational control over to another company, the company being outsourced might not share the same values or being driven by the same vision as the outsourcing company. Another disadvantage could be the hidden costs that come along with outsourcing. The contract with the outsourcing company will cover the details of the services they will provide, anything not addressed in the contract could call for the company to pay
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