What are the Pros and Cons of Outsourcing?

What are the pros and cons of outsourcing?
Outsourcing is often undertaken to provide enterprises a competitive advantage by delegating business process to external agencies and realizing the benefits of low labor, better quality and improved innovation. While this provides a good picture of the fair side of the coin, most managers however need to grope with the possible shortcoming of the process and the corresponding impact on the company’s core processes. To best analyze the opportunities presented it is essential to reflect upon the advantages vis-à-vis the disadvantages of outsourcing. The pros of outsourcing
The pros of outsourcing often positively reflected by enterprises across industries include: Better revenue realization and enhanced returns on investment Lower labor cost and increased realization of economics of scale Tapping in to a knowledge base for better innovation
Frees management time, enabling companies to focus on core competencies while not being concerned about outsourced routine activities Increases speed and the quality of delivery of outsourced activities Reduces cash outflow and optimizes resource utilization
The cons of outsourcing
Often weighed with the advantages before any decision on outsourcing is undertaken, the following represents some of the possible disadvantages often dwelled upon: Possible loss of control over a company’s business processes Problems related to quality and turnaround time
Sluggish response times coupled with slow issue resolutions
Shortcomings in performance vis-à-vis expectations
Lower than expected realization of benefits and results
Issues pertaining to lingual accent variation
An irate customer base coupled with enraged employee unions

Outsourcing brings in a lot of flexibility and financial freedom but it also has its pitfalls. Any company looking to outsource must keep in mind the pros and cons of outsourcing before deciding to take the plunge. Take a look at this list of advantages and