Prior to outsourcing any component or aspect of your business to a third-party vendor, for any company it is essential to understand the advantages and disadvantages of outsourcing. This creates a “make or buy” decision for organisations. Although outsourcing presents a variety of benefits to your organization, it could also pose difficulties if not outsourced to the right service provider. (Flatworldsolutions.com, 2016) The Main advantages of outsourcing include:
Cost Reduction: Primarily organisations outsource production to subcontractors in foreign countries to reduce overhead costs. Thought outsourcing to these third world countries, organisations benefit from lower production costs, lower maintenance cost, and lower labour costs. Outsourcing …show more content…
The subcontractor will not be driven by the same standards and mission that drives your company leading to non-congruent objectives. They will be driven to make a profit from the services that they are providing to you and other businesses like yours (Bucki, 2014). Therefore be more difficult to monitor for quality assurance and put policies in place to help increase customer satisfaction (The Pros and Cons of Offshore Outsourcing | Talkdesk, …show more content…
The critical evaluation of these advantages and disadvantages is of significant importance to a company when deciding if they may or may not use outsourcing to produce their product or service. It will determine if potential disadvantages such as cross-cultural differences may act as barriers, to undertaking in overseas outsourcing or if the potential advantages as outlined above will overcome these barriers. This in turn will help a company determine if undertaking in outsourcing operations is beneficial, feasible and profitable to the company in the production process, of their products or
Cost Reduction: Primarily organisations outsource production to subcontractors in foreign countries to reduce overhead costs. Thought outsourcing to these third world countries, organisations benefit from lower production costs, lower maintenance cost, and lower labour costs. Outsourcing …show more content…
The subcontractor will not be driven by the same standards and mission that drives your company leading to non-congruent objectives. They will be driven to make a profit from the services that they are providing to you and other businesses like yours (Bucki, 2014). Therefore be more difficult to monitor for quality assurance and put policies in place to help increase customer satisfaction (The Pros and Cons of Offshore Outsourcing | Talkdesk, …show more content…
The critical evaluation of these advantages and disadvantages is of significant importance to a company when deciding if they may or may not use outsourcing to produce their product or service. It will determine if potential disadvantages such as cross-cultural differences may act as barriers, to undertaking in overseas outsourcing or if the potential advantages as outlined above will overcome these barriers. This in turn will help a company determine if undertaking in outsourcing operations is beneficial, feasible and profitable to the company in the production process, of their products or