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As the owner of a business, you must have realised that as your business grows, you need to improve your efficiency without spending huge bucks to improve your competitiveness. 

One way to do this is by outsourcing some of your non-core business operations. In outsourcing, companies allocate some business operations to another company that is usually located in some Third World country to save on cost. 

These tasks do not require you or any of your staff members to be physically present in the country where the job is done, it can be done remotely.

For small businesses with limited resources, outsourcing can be a great option to save money. If you want an expert with specific skills or someone to share the extra workload, then outsourcing can be a great option. 

Although it sounds great, you must realise that it cannot be the panacea for all business-related problems. Outsourcing has both positive and negative sides. 

Therefore, we suggest that you should first do thorough research about the company you are planning to outsource.

The following pros and cons will clear your confusion about why outsourcing to India or any of the third world countries is beneficial for your business or not.

Advantages of outsourcing certain business operations 

Let us start on the positive side about what benefits your business will get if you outsource some of the work to a company in another country (mainly in the Third World country).

A wider talent pool

Outsourcing allows you to choose from a wider talent pool. Sometimes you need the help of professionals who have expertise in a particular field that may not be available in your core team. In such a scenario, outsourcing is the right decision.

The project can be completed faster

For a small business with limited resources and staff, it makes sense to outsource some of the time-consuming jobs to a third party so that the project timeline could be speeded up.

Focus on your core competencies

Outsourcing allows you to ship supporting processes to another company and focus your attention on the core areas of your business.

Share the risks

Risk assessment is an important part of any project. When you outsource certain elements of a project to other professionals who have expertise in specific domains, then you get high-quality advice, which helps in reducing risks.

Minimise the cost

Outsourcing your work in a piecemeal manner is always cheaper than hiring permanent staff. It helps you in reducing your overheads.

Your work can go on 24/7

If your company is located in the US, and you have outsourced some of your services to an Indian company, then the 12-hour time difference between these two places will ensure that your business will keep running even when you are sleeping.

The work is more targeted

Outsourcing some of your jobs gives you a chance to undertake new jobs, risks and experiment with different processes to find a new market as well as reducing the cost of your operations.

Peace of mind

Once you have outsourced your job to a reputable company, then you should rest assured that the experts would handle your job. You do not have to lose your mind in continuously checking, planning, and re-tweaking your plans. The entire burden of making the work done successfully now rests on the shoulder of the company to which you have outsourced your job.

Disadvantages of outsourcing your business work 

Although there are several benefits of outsourcing some of your work to another company, there are certain negative outcomes of this decision. Here is a list of the major cons related to outsourcing your business operations.

You don’t have direct control

Once you have outsourced some of your work to another company, then you lose control over how those tasks are done. If the company you have hired for your outsourced work is highly reputed, then you do not have to worry too much, but in case it is a fly by night operator, then you may fall in a big soup.

Look out for the hidden costs

Outsourcing to a third party is mostly cheaper, but you should read carefully the contract document before signing them. If you have not read the lengthy contract carefully, then chances are that you might be ripped off when the third party asks you to pay for some unexpected cost that you have not thought of earlier.

Data theft

Outsourcing your confidential information to another company can pose a significant security challenge. When you outsource some part of your job, then you are placing the privacy of your company as well as important data in the hands of another company. This can lead to a data breach.

Sacrificing quality

If the sole purpose of your outsourcing decision was to reduce costs, then you may sometimes choose a company that offers to do their job at a minimum cost. Outsourcing the job without giving two hoots about the quality can result in the substandard outcome that can affect the reputation of your company.

Important instructions lost in translation

When you are farming out some of your jobs to another company via email or telephone, then many a time, you will find that some of the important instructions are lost in translation. This can affect the timeline of your project, and increase the cost.

Conclusion

There are numerous points to both support as well as discourage outsourcing for small businesses. It is therefore important that you should take plenty of time, do some research and some cost-benefit analyses to find out whether outsourcing is the right decision for your business.

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