Outsourcing - Causes and Consequences

Outsourcing: Causes and Consequences
The economic development in a particular country determines some very intricate factors solely responsible for a country’s progress. When a business considers or evaluates the outsourcing of certain components of a business, they consider the advantages of outsourcing. If done for the right reasons, outsourcing actually helps a company grow and save a lot of money. Advantages of outsourcing are not always financial, they go beyond money. As the businesses evaluate the need to outsource, the disadvantages, since there are quite a few, cannot be ignored. If for a company, the outsourcing disadvantages outweigh the advantages of outsourcing, then it should be avoided.
Advantages of Outsourcing are a few, that helps the managers make a stance on if whether they want to outsource or not. For example, if a company launches a new product and expects a sudden increase in purchases, the managers may be required to outsource purchasing if they do not have enough man power. In rapid growth periods, the back-office operations of a company will expand also. This expansion may start to consume resources (human and financial) at the expense of the core activities that have made your company successful. Outsourcing those activities will allow refocusing on those business activities that are important without sacrificing quality or service in the back-office. There are certain operations in every company that prevents the company to not work at an optimum level because of certain in-consistent and unreasonable factors. Outsourcing will allow the company to not worry about that but focus on quality and management control more. Back-office functions and the costs allocated to them are usually very expensive. To counter the fluctuating prices, outsourcing can be effective. For example, an office space is limited and certain new operations are to be started for which new departments have to be made. Space limitations do not allow for further