Outsourcing – A Modern Phenomenon
Outsourcing – advantage or disadvantage? This is a question that has become a topic of hot discussion. Outsourcing seems to have assumed an overpowering presence in the modern world. While the phenomenon of outsourcing has manifold advantages, it has its share of disadvantages. Owing to the presence of low-cost labor in countries like India, China, Philippines, and Mexico, they have emerged as the places of choice for outsourcing. Services that are outsourced include medical transcription, legal transcription, legal scoping, data entry, document conversion, medical review, medical billing and coding, call center operation, recruiting support, search engine optimization and appointment scheduling.
Advantages and Disadvantages of Outsourcing
The various benefits of outsourcing are as follows:
- Enhanced business efficiency
- Effective handling of business jobs
- Better time management
- Tax benefits
- Trained but skilled manpower available at very low rates
- Expertise, resources, and up-to-date technological solutions from the outsourcing solution provider reduces need for investment on these by the client
- Increased productivity as more manpower can be made use of at lower costs
- Competitive advantage through greater productivity
- Increased focus on core competencies
- Sharing of business risks.
As outsourcing solution providers have a vast number of clients, it is possible that they may not be able to offer efficient service to all of them. Some of the other disadvantages of outsourcing include:
- Potential joblessness for the organization
- Lack of communication
- Delayed services
- Contract confusion
- Possibility of hidden costs.
- Disclosure of confidential information to the outsourcing provider leading to a possible security threat
- Slow response time or delivery
- Loss of direct control over company management
- Reduced sales owing to unsatisfied customers
Compare the Pros and Cons
If you are considering outsourcing solutions for your firm, compare the advantages and disadvantages before making a decision. With proper risk management and a dependable service provider, many of the disadvantages of outsourcing can be overcome.