The term outsourcing has widely spread in America. Outsourcing is not exclusively for manufacturing because you can get someone from a different nation on the customer support line. However, being popular is not an indicator of outsourcing being an all-time option. Outsourcing has its good and bad sides as the article below explains.
Outsourcing is advantageous because labor costs go down. One of the major factors that influence the amount you pay for this product is the much labor costs. Companies determine their prices in relation to the amount they pay its people. America has a higher cost of living, making factories to spend a lot in wages. However, the cost of living in China and India, meaning employees can receive lower wages and be in a position to cater for their expenses. This makes the cost at which factories manufacture to be low, enabling them to sell their products at prices that are competitive.
It is helpful to outsource because it avails more hours. While the weekly working hours of Americans is 40, technical issues do not care about 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. As a matter of fact, some IT companies subcontract services to all time zones to maximize the time they offer services. You can discover more about the benefits of outsourcing here.
Outsourcing is disadvantaged in that there is less quality control. When your company does everything in-house, you can perform the quality check by walking around. Outsourcing from a different country makes it hard to control quality. Issues can thus go on for weeks only to be noticed when customers complain or one taking an oversee flight to check what is happening.
Outsourcing is disadvantageous in that is lowers the morale of employees. When employees are not secure in their jobs, company morale gets damaged. When you begin to outsource various services overseas, the other staffs start to feel insecure. The staffs tense and embark on the search for better jobs. Read more facts about outsourcing and check it out!
Outsourcing is disadvantaged by cultural barriers. Different parts of the world have value systems that differ and what a region accepts may be unacceptable in a different 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. Language barrier also creates frustrations among customers and service providers.
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