10 Pros and Cons of Outsourcing

Outsourcing is a very popular term nowadays. What it means is hiring a third-party company to operate particular processes for your business, build a project from scratch, or assist with an already ongoing one.

One can hire such outsourcing services from the same country or from anywhere else in the world. And as you’ll find out further from the article, hiring foreign professionals makes a lot of sense. But why would a business do that?

Well, there are multiple reasons, which may include the lack of human resources or the need to finish the project faster, for example. Yet, it usually results from the numerous benefits this work model brings. So, let’s get into the advantages and disadvantages of outsourcing.

Pros of Outsourcing

1. Economical Efficiency

One of the main pros of outsourcing is pretty stunning cost-efficiency. It’s no secret that the average salaries differ from country to country. And it’s exactly why hiring foreign experts for your business needs is that cheap.

Let’s say, your company operates in the US. An average software developer there earns around 100,000$ per year. Surprisingly enough, professionals with the same or even higher level of qualification from countries like Ukraine or Belarus can earn from 3 to 7 times less money.

Of course, it does have a lot of economical reasoning behind it, but it’s not the case right now. What it means is that outsourcing companies can hire specialists in any field, offer them impressive wages, and receive top-level performance. And it will still be cheaper than the average market price.

For the hiring company, it means that finding a professional service (which isn’t hard at all) can save them from 50% to 200% of their planned expenses on human resources, without losing the quality of the product. It sounds a bit too good to be true, but it truly is a model where everyone benefits.

2. Simplicity

Forget about all the paperwork that comes with the hiring processes. No more countless interviews and application forms. Just contact the service, and they’ll do everything. In fact, such companies have already-made teams of professionals ready to take on any task you give them.

Also, it makes management much easier, as it’s the service’s responsibility. You’re able to monitor the performance and receive reports. But there’s no more need to hire managers that will control every step of team members.

3. Keeping the Focus

In some cases, outsourcing can be used to keep the core focus of your business in the same place. The reason is, some projects and tasks may require skills and knowledge that your business doesn’t specialize in.

So, a better idea would be to trust such matters to professionals in this field. They ensure the best quality of the product, as their qualification allows it. And your company can focus on what it does best.

What’s important too, is that some important assets can be reallocated to more important matters. For example, top managers or particular specialists can be assigned a completely new task. And the hired service can take on their duties. It allows an enterprise to take on any projects at any time, without losing any time and progress.

4. Sharing Risks – The Positive

If a service is hired to help with a particular part or even a whole project, it means that it’s responsible for the quality of every aspect. And that, in its order, means that all the risks are shared.

It doesn’t only help to build trust but also ensures that both parties will keep everything on the top level. And what’s even better is that such services usually have expert knowledge in building strategies. It means that all the risks are minimized.

5. Scaling

Scaling up is an essential part of any business. Yet, imagine all the extra expenses that come with expanding your pool of workers. The taxes, the paperwork, the recruiting, and so on.

However, with this work model, all these challenges are omitted. Just contact the outsourcing service, and they’ll provide you with as many professionals as you need. It’s that easy.

6. 24/7 Service

The difference in time has both positive and negative effects on the collaboration, but we’ll get to the latter in the cons section. For some businesses, operating full-clock is an essential aspect. It can be either a support service or even a core team. And outsourcing offers a perfect opportunity for 24/7 work.

It works in a very simple way. Services in this field usually have a large pool of specialists from all around the world. That means workers from different time zones can operate your business all around the clock.

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Cons of Outsourcing Service

1. Communication

The time zones, along with the language difficulties, make communication one of the main cons of outsourcing. It’s not easy to explain the project goals and requirements to a person that doesn’t understand your language, right? And trying to communicate with your workers when it’s 4 am in their time zone isn’t a pleasant experience either.

2. Reduced Control

Entrusting the tasks to a third-party company means that you won’t have that much control over all the processes. Of course, you’re the one making demands and deciding whether they’re fulfilled.

Still, controlling and monitoring your own workers is much easier. Especially considering that in most cases of outsourcing, you’ll communicate with the team supervisor, not the employees themselves.

3. Potential Security Issues

Of course, working with only top-rated companies on the market almost eliminates any security breaches. Yet, it’s hard to have 100% trust in anyone’s security these days. Most businesses aren’t entirely certain about their own security systems even with multi-million investments in this field, let alone trusting a third-party service.

4. Sharing Risks – The Negative

Sharing all the risks with another company is a risk on its own. Because it means that the success of your project depends on the stability of another company.

Any issues of theirs will impact the performance and the overall quality. In the worst-case scenario, it could even lead to you being left with an unfinished project. This makes shared risks one of the biggest disadvantages of outsourcing.

Summary

As you can see, the pros outnumber the cons and are way more significant. The key to success here is to work with the best services on the market only. It will minimize the potential risks, and ensure that the end result will lie up to expectations. So, always check the company’s reputation, portfolio, and legal documents, and you’ll never run into any troubles.

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