There are instances that a certain business can no longer perform the entire task internally. The need to hire external service providers to do other tasks or business processes is pretty much necessary. The allocation for this kind of service is called business process outsourcing and this is becoming more popular nowadays. However, this doesn’t necessarily mean that hiring external service providers to perform the process is permanent. Most of the time, it will be a temporary agreement. Once the service provider is assigned to perform the task they will be responsible to carry out their client’s assets.
Before deciding to outsource any part of your business to an external service provider, you should first know what are the advantages and disadvantages of outsourcing. It is very important to do your homework first before embarking to outsourcing for you to be able to weigh things out and of course to come-up with a smarter decision. So here, you will get some information that might be necessary for you. Before dealing with the advantages and disadvantages, get first the list of the most commonly processes in business that usually outsourced by eternal service providers:
• Legal Outsourcing
• I.T. Outsourcing
• Web design and web page maintenance
• Recruitment
• Manufacturing and production
• Logistics
• Technical and customer support
There are several factors why modern businesses today are deciding to go for business process outsourcing. Some may find it cheaper while maintaining the quality of the product but others find it practical to continue the overall processes of business while not taking the risk of hiring more employees and manpower and a there’s a lot more.
Disadvantages of Outsourcing
1. Puts the privacy of your company data into jeopardy – If a company will hire third party for some of their processes, the risk of exposing their confidential data is pretty much high.
2. Unsynchronized deliverables – Outsourcing the manufacturing of a product of a particular company can put a high stress in the uniformity of the production. There are instances that the quality may be at stake because of outsourcing.
3. Unfocused services – Most of the BPO service providers not only cater one or two clients. The risk is that, it can be possible that their attention to your company may be divided because they need to multi task.
4. Hidden charges – There are some instances that upon signing a contract, there are conditions that were not cleared. Now, if the third party is based on other country, the law on that particular state might affect the charges and cost that will lead to a much higher expenses for your company, though this rarely happens but this is very much possible.
Advantages of Outsourcing
1. Accuracy and quality – There are vendors that specialize on the field that they outsource better than your company could perform. If you will be able to choose the perfect partner, you’ll get surprised with the result.
2. Concentration on a specific process – If you have a huge company and it has a complex process, it is hard to gain control of your focus on a specific task, however if you will hire a third party, they can give a satisfactory result if their attention will be highlighted on a particular process that you will give to them.
3. Risk sharing – The most crucial aspect of a business campaign is risk-analysis. If you will hire an outsourcing company, they can help your company in mitigating the possible risks since they are considered as expert on that particular process. It is expected that they have the knowhow and experience to trap possible risks.
4. Minimize your operational costs – You can cut your operational and recruitment costs with them. You will be able to save time as well in terms of recruiting employees.
