Outsourcing is usually defined as when a company hires work that could be done internally. It has grown in recent years and most people have heard about it. Here are some advantages and disadvantages of how likely it will continue.
There are many reasons why outsourcing is as common as it is. Contrary to popular belief, it has been around for a long time. However, increased travel, faster and more efficient shipping, as well as the internet, have made it more practical and prevalent.
The biggest reason for outsourcing is and always has been the bottom line. When work can be accomplished with much cheaper labor elsewhere, companies almost need to use it to compete. Consumers want the cheapest possible products and companies that do not outsource while their competitors run the risk of being thrown out of business.
Availability or labor is another reason to outsource. Often, there are not enough workers available in an area who desire or have the skills necessary to perform certain jobs. Outsourcing manufacturing opens up the world as a possible source of work. In addition, working with people outside the company can bring new ideas and ways to make things work better.
Recovering focus is another reason to outsource. Many everyday tasks handled in any company have little or nothing to do with the product or services that the company offers. When other companies that specialize in these tasks execute them, the work can run more efficiently and the company that sent the work can focus on the product or service it provides to its customers.
Gaining experience and driving new markets is another reason. When a company sends a job to be done in a different area, it can learn about the market in the area where the work is being done. The feedback, experience and contacts provided can be a great basis if the company decides to sell your products. in that market.
Outsourcing has its problems though. One is loss of control. When a workforce is spread over a large area, it is more difficult to keep track of what is happening and to control how the work is done. This increases the chance of unpleasant surprises and possible substandard jobs or products.
Sending jobs also requires the sharing of information. This may open the door for competitors to spy on a business or their ideas to be stolen. In addition, may expose a company to bad press or political problems in other countries.
Overall, however, outsourcing obviously works and offers more advantages than disadvantages, or companies do not use it. The role it plays in business is likely to expand as technology approaches the world.