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What you lose in Outsourcing

While you figure that outsourcing could solve your problems and focus more on your business core competencies, you start to realize that there is more to know about outsourcing than the benefits it could do to your business.

Outsourcing deals with your fundamental principles that of which should apply to what your contracting parties should believed in. Entering into service level agreements is just like entering into a relationship where both parties need to understand clearly, what is expected as results. If such principles do conflict, unsatisfactory relationship could possibly occur and lead to an early termination of the contract.

The following are some of the disadvantages of outsourcing: 1. Outsourcing does damage the local labor markets. It

affects the jobs of individuals within the locality as companies begin to outsource causing job disruption and employment insecurity, 2. Outsourcing may decrease the quality or fail to realize business value. As the buyer (owner) lays his expectation and supplier (service provider) does the processing, the tendency that business value is not met. Buyer should see to it that quality service is delivered to its clients. For call centers outsourcing, linguistic features such as accents, word use and phrase used may be a problem, thus resulting to lower quality of service if call agents are having difficulty to understand the client.

3. Higher staff turnover. As staff is trained and company skills are transferred, growing number of employees leave.

4. Loss of control as to the hiring of qualified people to handle your product. There are unreliable suppliers who would opt

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for higher profit, thus hiring or replacing qualified people with less qualified due to cost reduction.

To outsource means choosing your best partner and build trust to one another.

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What Outsourcing Can Do?

How would you like to focus on your business expansion and meet new investors, leaving the nitty-gritty stuff of production to service companies to do the work. By so doing, you still continue to be the owner of your company and earn the profits, with less worry on your shoulders.

Outsourcing is the process of transfer of management or the day to day function of a business function to an outside service provider. The transfer in outsourcing involves the transfer of control. Wherein the buyer who is the owner of the company, looks for a supplier to manage the business function/ The buyer and supplier enters into a contract agreement which defines the type of service that the supplier is to deliver and the buyer s obligation to the supplier upon fulfillment of the service. The buyer is not to instruct the supplier how production is to go about, but instead communicate to the supplier the results that is expected and the process involve in accomplishing those expectations are left to the suppliers strategy.

A large number of companies have adapted outsourcing and found to be a strategic management option. In a competitive world, businesses should start to focus on their core competencies. While it has been criticized to cause unemployment to some countries and is threat to the economy, outsourcing has positive effects on a large level. Through outsourcing, companies can pass the product to its consumers at reduced costs, as there will be high demand for the product if sold at a price lower than what your competitors are selling. The products are marketed as a high tech product due to the high quality control placed into it.

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