OUTSOURCING...=)
by Karina Limon


Outsourcing can be defined as passing of service provision or production to another internal or external party. The main reason of outsourcing is to reduce capital expenditure over a business process and its advantages go on and on like, management gets more time to concentrate over more competencies. This also reduces the dependency upon internal resources and increases the flexibility to meet the changing business and commercial conditions.

But outsourcing is not about rainbows and treasures. Of course, it has it disadvanges and I want to focus on them. Why is outsourcing not really a good idea? Well...

It tends to loose the managerial control. This happens because it is harder to manage the outsourcing service provider as compare to managing one's own employees. Also because we generally tend to skip (or miss to calculate) the potential hidden costs of outsourcing which includes legal costs of putting together a contract between companies and time spent on coordinating the contracts, we feel that outsourcing reduces the overall expenditure of a business process, one of the major reasons why a company goes for outsourcing. This hidden and missed out costs of outsourcing is hard to predict causing overall costs to be underestimated.

Another disadvantage is that outsourcing can also prove to be a threat to the security and confidentiality of issues of a company. If your company is outsourcing business process such as payroll, confidential information such as salary will be known to the outsourcing service provider. Therefore one must be very careful in choosing which business process to outsource and which one not.

http://www.softwareprojects.org/disadvantages-outsourcing.htm