What Is Outsourcing?

831 Words 4 Pages
Outsourcing is a topic that businesses have to discuss in order to decipher if outsourcing is advantageous for their business, or provides menial benefits. Many companies who are cost quality conscious are gearing towards the doing business with different countries. What exactly is outsourcing, and will the benefits of outsourcing outweigh the disadvantages? This article will define outsourcing, and analyze if outsourcing will be valuable for organizations.
Particularly, outsourcing is defined as the action companies take to entrust the process of their business functions to external vendors. This work is generally performed by employees inside the company, but from sources outside the company. For example, these functions can include customer
…show more content…
To reiterate, Dell is considered a modular organization because their manufactures are independent companies who may provide services to their competitors. These independent outsourced companies assemble their computers, and provide parts that assist in operating computers. Many companies today have continued with this parallel trend and outsources their business to assist in providing products and services. One prevalent form of outsourcing is Business Process Outsourcing. As mentioned earlier, this includes finance and accounting, customer care, supply-chain logistics, engineering, and sales and marketing (Pearce &Robinson, 2011). A popular trend stems from major companies purchasing from Asian developers with their …show more content…
Outsourcing may be beneficial if more employees are required to keep up with the demands of the business, but the budget does not allow for more office space or hiring new employees. Many customer service representatives are now in another country. Supporters of outsourcing calls state they eliminate or reduce the operational, infrastructure, overhead, and labor cost associated with operating a call center. They are also able to operate a 24/7 call center without spending too much money.
In contrast, there are many disadvantages to outsourcing, and many people oppose outsourcing. Outsourcing places control of that function outside the company. This loss of control brings on future problems such as delays, quality issues, customer complaints, etc. Skills important to a product or service can eventually diminish. The things a company does is essential to their success. Overtime outsourcing can lose the capacity in the firm being able to perform these skills

Related Documents