Outsourcing Essay

408 Words2 Pages
Advantages of Offshore Outsourcing • Core activities of the business take center stage. Outsourcing non-core activities such as administration and back-office operations helps to put the focus back on the core functions of the business, such as sales and marketing. • One of the biggest advantages of outsourcing to India (or any other location) is cost savings. The lower cost of operation and labor makes it attractive to outsource. • Outsourcing reduces overhead costs that usually come with running back-end operations. • When certain functions of an organization become operationally uncontrollable, outsourcing helps to overcome such difficulties. • A company's cash-flow can be streamlined. • By increasing productivity and efficiency, a business can be more successful and better-prepared for market challenges. • Outsourcing frees an organization from investments in technology, infrastructure and people that make up the bulk of a back-end process' capital expenditure. • Outsourcing gives businesses flexibility in staffing and manpower management. Since the service provider is responsible for managing the workforce, you save costs and can also pick the best people to run your core functions. • Offshore outsourcing gives businesses the ability to develop new competencies and skill-sets that can be used as a competitive advantage. Disadvantages of Offshore Outsourcing • One of the biggest disadvantages of outsourcing is the risk of losing sensitive data and the loss of confidentiality. It is important, therefore, to have checks in place to avoid data loss. • Losing management control of business functions mean that you may no longer be able to control operations and deliverables of activities that you outsource. • Problems with quality can arise if the outsourcing provider doesn't have proper processes and/ or is inexperienced in working in an outsourcing

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