Pros and Cons of Outsourcing
The term outsourcing has increased in popularity in America. Outsourcing is not limited to manufacturing since it is possible to get customer support from people in other states. However, being popular is not an indicator of outsourcing being an all-time option. Outsourcing has its good and bad sides as the article below explains.
Outsourcing is advantageous because labor costs go down. One of the major factors that influence the amount you pay for this product is the much labor costs. Companies set prices of products in line with the much they spend on their people. The cost of living is high in America and this translates to higher wages for factories. However, the cost of living in China and India, meaning employees can receive lower wages and be in a position to cater for their expenses. This makes the cost at which factories manufacture to be low, enabling them to sell their products at prices that are competitive.
It is good to outsource because it creates more hours. While Americans work for 40 hours a week, technical issues are unconcerned with matters of time. In case a company has an interest in offering customer support in-house; employees have to remain active the entire day a whole week as suggested on this website. Staffs in the office at 0000h may experience issues like insomnia, insufficient sleep, difficulty in concentrating, lack of energy, irritability, and difficulty with personal relationships. However, if someone in India answers customer service at midnight, it is day time for them. As a matter of fact, some IT companies subcontract services to all time zones to maximize the time they offer services.
When you outsource, you are disadvantaged since you have less quality control. When your company does everything in-house, you can perform the quality check by walking around. Outsourcing from a different country makes it tough to control quality. Therefore, issues can be taking place for weeks only for you to notice them as customers complain or you decide to fly overseas to see the progress.
It is not advisable to outsource as this lowers employee morale. When staffs feel insecure in their jobs, company morale is ruined. When you decide to outsource different services overboard, the remaining staffs begin feeling insecure. They tense and begin to search for greener pastures.
Outsourcing is disadvantaged by cultural barriers. Different parts of the world have value systems that differ and what a region accepts may be unacceptable in a different region. If the outsourced company does not have the same cultural values as your business, they may have different business priorities hence causing problems. Also, language barrier brings about frustrations among service providers and customers.