The term outsourcing has increased in popularity in America. Outsourcing is not for use in manufacturing only because it is possible to connect with a person in another nation on customer care line. However, being popular is not an indicator of outsourcing being an all-time option. Outsourcing has its cons and pros as explained in this article.
Outsourcing is helpful since it helps one to cut labor costs. Among the core factors that determine the price at which a commodity is sold is the cost of labor. Companies set prices of products in line with the much they spend on their people. America has a higher cost of living, making factories to spend a lot in wages. However, the cost of living is lower India and China, meaning staffs can be paid lower wages and meet their needs. This lowers the cost of manufacturing hence able to offer, allowing them to offer products at a competitive price.
It is advisable that you outsource because more hours are created. While the weekly working hours of Americans is 40, technical issues do not care about time. If this company wants to provide customer support in-house, its offices would need staffs to work 24/7, meaning you could operate with a three-shift program. Staffs in the office at 0000h may experience issues like insomnia, insufficient sleep, difficulty in concentrating, lack of energy, irritability, and difficulty with personal relationships. However, people answering this service in India at midnight will have no issues because it is day time in India. In fact, some IT providers outsource to numerous time zones to add the time services are available.
Outsourcing is disadvantaged in that there is less quality control. When a company perform everything in-house; it is possible for owners to do a quality check by walking around. Outsourcing from a different country makes it tough to control quality. Therefore, issues can be taking place for weeks only for you to notice them as customers complain or you decide to fly overseas to see the progress.
Outsourcing is disadvantageous in that is lowers the morale of employees. When employees are not secure in their jobs, company morale gets damaged. Upon starting to outsource different services overseas, the remaining employees begin to feel insecure. They tense and begin to search for greener pastures.
Cultural barriers disadvantage outsourcing. Value systems slightly differ in various parts of the world, making what a region sees acceptable to be a taboo in another region. In case your cultural values and those of the business you outsource differ, business priorities will be different and problems are likely to occur. Language barrier also creates frustrations among customers and service providers.