The Pros And Cons Of Outsourcing

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Outsourcing is the process of transferring certain parts of work to outside suppliers rather than completing it internally. This system or practice has been used by different companies specially to reduce the cost of production. “Outsourcing can also be defined as an arrangement in which one company provides services for another company” (Whatls definition, 2007). Newman and Ross (2015) further note that the trend of outsourcing has become more familiar in the field of information and technology and other industries for services that have usually been regarded as intrinsic to manage a business. The planning, business analysis and strategies as well as the installation, management and the entire information can be outsourced from one company…show more content…
If the outsourced companies are likely to lack experience in the industry, the manufacturing quality may diminish. Sometimes, they can use cheaper material which can be detrimental to the company using outsource facilities. Lack of proper communication is another risk that which may result in mishap and delays. Sometimes, outsourcing can cause problems related to unanticipated costs. Furthermore, it can create difficulties in managing the service provider beyond those present when managing people and processes sited within the company, particularly over…show more content…
Thought it has different advantages, companies must be aware when using outsourcing facilities. The companies wish to outsource the business because of the different advantages. Companies or organizations usually use outsourcing in different business processes to reduce the production costs. They can have much better and faster services. They could also be able to get the qualitative product by investing lower amount of money. Low international labor cost is one of the reason that companies usually prefer outsourcing facilities. If the outsources partners are better, then it also helps to increase the efficiency of work. By outsourcing the services to another company, they could have access to skilled resources. Saving on infrastructures and technology, focusing upon core areas, enhancing risk managements as well are some of the important advantages that could be gained by outsourcing

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