DarkAngel
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outsourcing has its pros and cons and contrary to general beliefs, outsourcing is not always a viable option to all kinds of business.
outsourcing's main advantage for a company is that it enables the business to invest resources into more profitable activities, or your key competencies.
outsourcing may be a viable option for processes or functios such as payroll, accounting, manufacturing and delivery to customer service, employee training, property management and computer services.
however, companies should be careful not to outsource functions that appear negligible, but that are actually essential, such as customer service operations in a small business that relies on building rapport with a loyal customer base.
if you're thinking of outsourcing, make sure the function is not central to generating profits or competitive success. also make sure that the task is more expensive in-house or drains more resources than if you outsource it.
remember that outsourcing doesn't only mean transferring your company's functions to another country (offshore). it can be done by another company within the same area (onshore), or in a nearby country such as from US to mexico (nearshore).
for countries with a healthy outsourcing industry, it has its advantages too. in the philippines, call centers have helped stem the "brain drain." young men and women who would otherwise seek greeneer pastures abroad enter call centers because the pay there is above-industry. it is not true that workers of call centers are paid next to nothing. in fact, call center employees enjoy above-average wages, and with the bonuses and performance incentives, one can actually earn up to 200% of the pay one would otherwise be getting in non-call centers for the same work.
hope this helps. |
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xmas90
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it saves companies money...it is tough for employees..
outsourced companies pay less money and they have fewer benefits. |
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jenn m
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low cost in wages and benifits |
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Dave
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When all is said and done, money is the only benefit. |
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annierose
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i am an American doing outsourcing, i like it. i am able to work from home, i can choose who i work for, and use computer programs on a computer i know well. i have no daily travel time, i do not need a closet full of business clothing, and i am not forced to go on group lunches or donate for someones gift.
i have difficulty with outsourcing to other countries, the least of my reasons are their accents make it really hard to understand, my simple last name is continually mispronounced, and if you answer (or ask) something not on the script, they freak out |
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cattgirl09
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UHHHHHHHHHHHHHHHHHHHHHHH mabe cheapr |
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-
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ur countries econmomy increases while the country ur draining becomes poor. |
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Jono
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you can get people, who know what they're doing, to do what you want done |
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enam_on_evah_i
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hutsong got it right, profits for coperations and unemployement for the workers.
What's that? Got to school? Get an education? And how will the person pay for it? If they do not qualify for financial aid or how will they pay it back if they do get it?
How long does the average college graduate with either a B.S or Master take to attain a job?
I've meet people who have a Masters and it's your overqualified.
Boils down to circular logic if you ask me.
NO real advantages comes from outsourcing only for the CEO.
Maybe CEO's poistions should be outsourced. After all why pay a CEO millions of dollars a year to run a company when someone else can do it for less? |
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hutson
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Advantages; More profits for corporations.
Disadvantages; Unemployment rises,"hundreds of thousands loose rheir jobs". |
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expert
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There are more profits and it is so much cheaper. |
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pcman3550
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I work at IRS and the agency tried outsourcing but found that it actually costs more than what was predicted to replace federal employees. So, I don't think it's all what it's cracked up to be. It doesn't work for everyone. Especially if you're one of the affected employees being replaced. I came close to this experience. |
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KT
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Some people say that it actually improves the economy. If they oforeigne to other countries, the people in other countries are doing the jobs that people don't want to do here (like working on an assembly line).
Also, it's cheaper because it costs less to business to work in foriegn areas. |
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Diamond in the Rough
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Job creation for other countries and higher profits for American comp. |
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RT
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you only pay it when you need it. |
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samjung223
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It's good for corporate execs and shareholders, and that's IT. Everyone else gets screwed, it's a dumb practice and it has to end! |
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xzuckermaeuschenx
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For the exploitative bourgeois capitalist pig, you can make more of a profit by paying people in periphery countries to work for next to nothing.
It's amazing how much money one can make when you take away those awful labor laws that the US has. I mean, the federal minimum wage is $5.15 an hour! How can anyone be expected to make a profit at such exorbitant rates? |
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dummy
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The company that is outsourcing can hire cheap labor. And then sell you the product for twice what it originally cost because now they have to ship it from over seas. So if you are a big business you can now be even richer. |
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Frank Castle
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More Profits |
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Tango55
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Lower wages, less overhead using contractors in other countries such as India, Mexico, Hong Kong. |
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kevinlange2005
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The advantages of outsourcing, in nearly all circumstances, involve the most basic of accounting methods, and, in fact, are a facade.
The one-dimensional answer to why outsourcing is "advantageous" involves monetary savings. Presumably, the company to which you outsource can perform a particular task in a way which is more financially efficient. On a balance sheet, this looks great. The aspects which do not make a direct appearance on a balance sheet (though have a significant impact) usually outweigh the perceived benefits.
Outsourcing agencies can perform tasks "cheaper" because of at least one of two things: pinching pennies, and economies of scale. By pinching pennies, the company may resort to inferior materials, unreliable machinery, or underpaid workers. In each instance, quality takes a direct hit, whether the industry is industrial or service-based. Economies of scale involve having enough traffic or "volume" to decrease "fixed costs" (such as plant, equipment, and labor) to the point a savings is realized. Usually, this involves using similar resources (again: plant, equipment, and labor) for multiple clients, which means the company to which you outsourced is not giving you 100% of their attention or capabilities.
Whenever a company outsources part of their operation, they lose a certain amount of "control". No matter how meticulous one dictates the terms of contract, the company to which your effort is outsourced gains a certain amount of "control" in how your company is operated, because they, in part, are operating your company. Their policies and procedures will at some point conflict with yours, to which they will likely ignore your preferences in favor of theirs. Again, this all depends on how well the contract is drafted, but companies specializing in outsourcing tend to generate intentional loopholes in the legal verbiage to allow them some breathing room in the process, and will exploit those loopholes if it will allow them to get out of doing something they do not want to do.
Once the contract is finalized, the company "owns" part of your business, essentially. Unless they conduct a gross breach of contract, you will contractually be "stuck" with them. Knowing this, they will not go out of their way to accomodate your company. This can be lessened somewhat by creating conditional clauses, or limiting the terms of the contract to a small time period (for instance, two years, instead of ten years).
I personally have yet to experience an outsourcing event in which the company outsources their effort to achieve a true "profit". A company may benefit in an immediate financial sense, but quality of product, quality of service, and speed of delivery usually suffer to the point repeat clients are lost. Generating new customers can cost ten times the amount of retaining a current customer, so unless outsourcing cuts your immediate costs by more than 90%, other than in "textbook" cases it simply is not worthwhile. |
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mkganger_2000
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So many already answered but the biggest benefit is that american people are challenged and they cannot remain in their conmfort zone like previous folks. Gone are the days of sitting back and think we are the best.
For all the whiners...you may slip back to lower class.
Please understand, America doesn't have socialist word in its constitution. |
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Romantic Warrior
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CHEAPER TAXES, CHEAPER LABOR AND HUGE HUGE HUGE PROFITS THAT YOU DON'T HAVE TO SHARE WITH THE AMERICAN PUBLIC OR GOVERNMENT AND STILL HAVE ALL THE RIGHTS TO ABUSE THE SYSTEM AND BLAME THE ECONOMY ON ONE PRESIDENT INSTEAD OF YOUR COMPANY. AND THE BEST REASON OF ALL IS PUT OUT A CHEAPER QUALITY PRODUCT SO THAT IT BREAKS A LOT AND EVERYONE STILL HAS TO BUY YOUR CRAP, BECAUSE THAT'S WHAT THE AMERICAN PUBLIC TRIES TO INSTILL IN EVERYONE, THAT IF YOU DON'T BUY AMERICAN YOUR UNAMERICAN. SO THE UNION SHOVES THIS CRAP DOWN EVERYONES THROAT AND THEN CHARGES THE EMPLOYEES A TON ON UNION DUES AND THESE GUYS DON'T HAVE TO WORK FOR A LIVING AND THEN THE LABORERS GET LAZY AND THEY DON'T HAVE TO WORK HARD BECAUSE THEY KNOW THE UNION WILL STICK UP FOR THEM AND PREVENT THEM FROM GETTING FIRED. SO YOU SEE THERE ARE A LOT OF REASONS TO OUTSOURCE IF YOUR GREEDY AND LAZY. |
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Karl
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By sending work overseas, where the workers have much fewer rights and access to legal remedies, companies can screw over the work force. That's Capitalism for you. |
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catwoman
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IF YOU CAN IT ADVANTAGES, IT'S BAD FOR EMPLOYEES EVERYWHERE!!! |
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lilman401
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you don't pay as much because the people who will work will work for a lot less. |
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brim_smith
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Cheaper for th CEO meaning more money in his pocket
For the employees NONE |
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Elegantly Black
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Hi,
Its very good question. I run a International 3rd Party Outsourced Contact Center in India. Their are lot of advantages of Outsourcing. Some of them are:
1. It costs the clients less than what it would cost them if they were to set up their own Customer Interaction Center. The clients save on astronomical costs in building up the infrastructure, viz., Real Estate, Interiors, Hardware Equipments, Expensive Software’s, Hiring, Training and Managing Manpower and other operational costs and overheads. Most importantly the client save on the time and effort to do all of the above.
2. They benefit from the competencies and cross industrial expertise of the professionals at the Customer Interaction Center they hire. Any outsourced Center would usually have more than two clients across various categories. This gives them exposure across multiple categories and a cross section of customers.
3. The activity is manned and supervised professionally. The core competence of outsourced Customer Interaction Center is Customer Interaction Management; therefore they understand the finer details of Customer Interaction Operations much better, in a way that most organizations with core competencies in other activities
Apprehensions
Quality Issues In Outsourcing
The client does not lose control of the operations, as they will be provided with a supervisor terminal with a dedicated voice and data channel in the bandwidth that will allow them to supervise operations remotely. They may choose to barge in at anytime and listen to or monitor any customer interactions throughout all channels like live chat or any voice channel. A world-class state of the art Customer Interaction Center will always be able to provide the client with all the necessary MIS data.
These are some of the finer points on outsourcing for Customer Interaction Center, similary the base remains the same for all the units which are being outsourced. |
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writerbynature
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Link below is to an article on outsourcing administrative support services. |
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GreasySideburns
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less pay for workers = more $ for big business |
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insightfireiron
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another avenue for global colonization by economic and employment means and practices. The colonialists see this as an advantadge, those who wish to maintain idigenous (spelling?) culture and industries probably do not.
another advantage -in my opinion- is the increased traffic- in terms of tourism and exposure to other cultures by business and politicos- between outsourcing countries and the countries they out source to. This brings media attention and public awareness to the inequities that workers and industries in both countries are or should deal with, address, resolve. |
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