The popularity of the term outsourcing has increased in America. Outsourcing is not exclusively for manufacturing because you can get someone from a different nation on the customer support line. However, popularity does not mean you should always go for outsourcing. There are benefits and disadvantages of outsourcing.
You will benefit by outsourcing because it lowers labor costs. Among the core factors that determine the price at which a commodity is sold is the cost of labor. Prices at which companies do offer their products are determined by the much its labor costs. The higher cost of living in America makes factories to pay higher wages. However, India and Chinas cost of living is lower and you can pay employees less and meet their needs. This lowers the cost of manufacturing hence able to offer, allowing them to offer products at a competitive price.
It is helpful to outsource because it avails more hours. While Americans work for 40 hours a week, technical issues are unconcerned with matters of time. If this company wants to provide customer support in-house, its offices would need staffs to work 24/7, meaning you could operate with a three-shift program. Employees who work at mid-night get disorders such as insomnia, difficulty with personal relationships, difficulty in concentrating, irritability, lack of energy, and insufficient sleep. For India, American midnight will be day time and it will not be a big deal for people responding to customer service at India. In fact, some IT providers outsource to numerous time zones to add the time services are available.
It is disadvantageous to subcontract because you are not able to control quality. When a company perform everything in-house; it is possible for owners to do a quality check by walking around. Outsourcing from a different country makes it tough to control quality. Therefore, issues can be taking place for weeks only for you to notice them as customers complain or you decide to fly overseas to see the progress.
It is not advisable to outsource as this lowers employee morale. When employees are not secure in their jobs, company morale gets damaged. Upon starting to outsource different services overseas, the remaining employees begin to feel insecure. The staffs tense and embark on the search for better jobs.
Outsourcing is disadvantaged by cultural barriers. Value systems slightly differ in various parts of the world, making what a region sees acceptable to be a taboo in another region. In case your cultural values and those of the business you outsource differ, business priorities will be different and problems are likely to occur. A language barrier also brings about frustrations among clients and service providers.