Business process outsourcing can be a viable way of improving the productivity of a company. It is often cost-effective and allows a company greater flexibility. Likewise, third-party contracting can readily provide the services and human resources which a company greatly needs. However, before a company should decide on outsourcing jobs, the management of the company should carefully consider several factors such as the cost-effectiveness of outsourcing and the flexibility it would allow the company. If indicators point to the fact that outsourcing will be disadvantageous to a particular company, then that company should definitely relent in outsourcing jobs to a third-party service provider. Yet, in most instances, the advantages of outsourcing seem to far outweigh the disadvantages that are concomitant with outsourcing. Say, for instance, a big telecommunication company would definitely need customer services and technicians. Yet, if that company is located in the United States where the average wages of workers are high, then it would be advantageous and cost-effective for that company to engage in top offshore outsourcing of customer and technical jobs to countries where wages and the cost of operation are less. In the same manner, even in the simple preparation of PowerPoint presentation, most companies find it cost-effective to outsource the very act of preparing the PowerPoint presentations.
Outsourcing—a Tricky and Difficult Decision
Outsourcing can be a very tricky and difficult decision to make for the management of any company. There are factors that the management and the decision-makers of a company have to consider before it decides to outsource jobs and services. Say, for instance, first, it has to assess the technology, trends, and demands for its company’s product and service. Likewise, it has to assess the strategies it has to employ during the outsourcing process. Moreover, before a company decides to outsource jobs, it has to conduct a thorough analysis of outsourcing and insourcing alternatives. Lastly, it has to have an overall view of everything—its pros and cons—before it makes the big decision to outsource.
In the process of assessing trends, the management of a company has to make a relative assessment of the status quo. Say, for instance, in the abovementioned example about outsourcing PowerPoint, the company’s management has to assess the relative cost of outsourcing as compared to having the PowerPoint jobs done in-house. If the cost of outsourcing is less than that of insourcing, then the decision to outsource is definitely a good decision. Likewise, the management has to assess the quality of the service that would be provided by the third-party. Say, for instance, if a company already has an in-house expert in PowerPoint preparation, why would the management dare to outsource this job? Yet, if the management deems that outsourcing the job will be cost-effective and can give the company higher quality PowerPoint presentation, then outsourcing will surely be a right decision. It is self-defeating if the quality of works of the third-party is subpar with the quality of works of the in-house staff. These factors of quality and cost-effectiveness, for this reason, have a strong bearing on the decision-making process of management to outsource a job to a third-party.