ADVANTAGES AND DISADVANTAGES OF OUTSOURCING
ADVANTAGES AND DISADVANTAGES OF OUTSOURCING
GROUP 6
ARDILLO
OBELLY 10115946
FARIZAL
NUR PRABOWO 12115530
MUHAMMAD
AFNAN FADILAH 14115468
MUHAMMAD
JAMIL NASRULLAH 14115673
MUHAMMAD
IKHSAN 14115641
Definition of Outsourcing
Outsourcing
is a business practice in which a company hires another company or an
individual to perform tasks, handle operations or provide services that are
either usually executed or had previously been done by the company's own
employees.
The
outside company, which is known as the service provider or a third-party
provider, arranges for its own workers or computer systems to perform the tasks
or services either on site at the hiring company's own facilities or at
external locations.
Companies
today can outsource a number of tasks or services. They often outsource
information technology services, including programming and application
development as well as technical support. They frequently outsource customer
service and call service functions. They can outsource other types of work as
well, including manufacturing processes, human resources tasks and financial
functions such as bookkeeping and payroll. Companies can outsource entire
divisions, such as its entire IT department, or just parts of a particular
department.
Outsourcing
business functions is sometimes called contracting out or business process
outsourcing.
Outsourcing
can involve using a large third-party provider, such as a company
like IBM to manage IT services or FedEx Supply Chain for third-party
logistics services, but it can also involve hiring individual independent
contractors and temporary office workers.
Reasons for Outsourcing
Companies
often outsource as a way to lower costs, improve efficiencies and gain speed.
Companies that decide to outsource rely on the third-party providers' expertise
in performing the outsourced tasks to gain such benefits. The underlying
principle is that because the third-party provider focuses on that particular
task, it is able to do it better, faster and cheaper than the hiring company
could.
Given
such benefits, companies often decide to outsource supporting functions within
their businesses so they can focus their resources more specifically on their
core competencies, thereby helping them gain competitive advantages in
the market.
However,
some companies decide to outsource for other reasons.
For
example, they outsource because they're unable to hire in-house workers with
the specialized skills and experience needed to perform certain jobs.
Companies
sometimes opt to outsource as a way to shift meeting regulatory requirements or
obligations to the third-party provider.
Furthermore,
more companies are looking to outsourcing providers as innovation centers.
According to Deloitte's 2016 outsourcing survey, 35% of respondents said they
are focused on measuring innovation value in their outsourcing partnerships.
Advantages and
Disadvantages of Outsourcing
In
the right context and deployed shrewdly, outsourcing can be a fantastic way for
small business owners to improve efficiencies and bolster their company’s
bottom line. But that doesn’t mean the practice isn’t without its own
disadvantages, too. Outsourcing isn’t right for every situation, and so you’ve
got to think long and hard before investing time and energy in farming out work.
To
help you get started, here are 20 advantages and disadvantages of outsourcing
from your small business.
Advantages
of Outsourcing
1.
You Get More Experts
Your
core team might be fantastic at a few things, but nobody is perfect at everything.
By outsourcing particular tasks, companies are often able to substantially
improve performance by drawing on the niche skills of experts in
certain fields.
2.
Things Get Done Fast
One
of the top reasons small businesses tend to outsource work is because it will
get done quicker. If you’re working with a limited number of staff members, you
can get things done a whole lot quicker by passing time-consuming tasks on to
freelancers or external agencies.
3.
You’re Able to Focus on What Matters
Another
benefit of outsourcing tasks is enhanced freedom. By passing on supporting
processes, you’ll be able to concentrate your skills on strengthening and
improving the core processes that help make your business tick.
4.
You Can Share Some Risk
One
of the most important factors in any project is risk assessment and analysis.
By outsourcing certain campaigns or processes on to experts in their respective
fields, you will benefit from their enhanced ability to plan and mitigate
potential risks.
5.
You Can Reduce Costs
As
one might imagine, outsourcing piecemeal work is almost always going to be
cheaper than hiring permanent full time staff. Not only will you save time and
money on recruitment, but your profit will also be extended than s to shorter
overheads.
6.
You Can Work Around the Clock
One
major benefit of outsourcing digital work overseas is the substantial
differences you might encounter in terms of time zones and holidays. Although
this can pose an initial hurdle logistically, once overcome it can effectively
mean your business is running even while you’re fast asleep.
7.
You Can Simplify Project Management
If
you choose to outsource work via a wide range of specialist freelance
websites and online services, you’re often provided dynamic and
intuitive platforms that will help you to effectively manage what’s being done,
when it’s due for submission and how it will be paid. Most of this can be
automated, freeing up your time for more important work.
8.
You Simplify Work Relationships
Quite
a few small business teams are tight-knit groups of friends and family — which
is fantastic. But when you’re incredibly close to your staff members, it can
also lead to issues when work isn’t being done up to par. By outsourcing work,
you’ll typically be able to minimize work relationships to simple, contractual
arrangements.
9.
Efforts Are More Targeted
Another
overlooked advantage of outsourcing is that it enables you to plan and execute
more effective, targeted campaigns and projects that you wouldn’t ordinarily be
able to take on. This gives your business the chance to take new risks and
experiment with different methods of exposure.
10.
You Get Peace of Mind
At
the end of the day, choosing to outsource with a reliable individual or agency
should give you peace of mind that tasks are being handled expertly and
efficiently without you having to worry or lift a finger. What could be better?
Disadvantages
of Outsourcing
1.
You Lose Some Control
As
you might expect, when you farm work out to external agencies or freelancers,
you’re losing control of how those tasks are being monitored and performed. So
long as you know and trust who you’ve hired, that shouldn’t be a huge issue –
but you’ve got to tread carefully.
2.
There are Hidden Costs
Although
outsourcing work is generally considered cheaper, yo must also beware of
getting ripped off. Outsourcing companies or big agencies will typically ask
small business owners to sign lengthy contractual agreements, and they’ll
include plenty of fine print. If you don’t read the terms carefully, you could
get hit with unexpected costs.
3.
There are Security Risks
In
this age of data protection, it’s essential that you exercise caution whenever
using customer data. If you plan to outsource processes that require personal
data, you could be placing the privacy of others or security of your business
at risk by passing that data on to other people.
4.
You Reduce Quality Control
Outsourcing
companies and some freelancers may often be motivated by profit rather than a
job well done. That means the work you send out may come back quickly, but will
lack the standard and qualitythat customers have come to expect
from your products or services.
5.
You Share Financial Burdens
Although
it can be nice to bring in expert agencies to share in risks, it can be pretty
dangerous to tie your business to the financial well-being of another company.
Again, you’ve got to spell out any and all terms and conditions in contractual
arrangements plainly – because you don’t want to take a financial hit if they
fail to deliver.
6.
You Risk Public Backlash
If
you’re taking work overseas (even just to write a blog or two), your business
very well may run into ill will from consumers that have taken a moral stance
against outsourcing. Right or wrong, for better or for worse, some form of
criticism is often inevitable.
7.
You Shift Time Frames
One
major disadvantage of outsourcing particular tasks is the risk that your
freelancers or partner agency may be marching to the beat of a different drum.
As a result, it might be difficult to synchronize schedules in order to ensure
your customers receive what’s promised to them on a reliable timeline.
8.
You Can Lose Your Focus
Because
many outsourcing agencies or freelancers tend to service multiple clients at any
given time, the work you’re sending out may not be receiving the focus
it deserves. Depending on the processes you’re outsourcing, that lack of
focus could be detrimental to your small business.
9.
Things Get Lost in Translation
It
doesn’t matter whether you’re dealing with overseas freelancers or some
talented expert just up the street – but if you’re handing out remote work via
email or telephone, important instructions are often lost in translation. That
could cause you serious time, money and hassle.
10.
You May Face Moral Dilemmas
While
it may not be an issue for everyone, a major disadvantage of outsourcing is
that you may be denying your team or a talented local agency crucial work or
development opportunities. Growth begets growth, and by outsourcing work, you
may not be contributing to the growth of your community.
SOURCE
1 komentar — Skip ke Kotak Komentar
Thanks for writing this great article! It’s very informative, and you included some great points to the equally great article regarding Outsource Customer Services.
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