Pros and Cons of Outsourcing What You Need to Know

Amy Pattinson
August 17, 2022
 Mins Read

In the current digitized era, organizations rely on outsourcing to fill skill gaps/knowledge when they don't have skilled professionals/ budget to hire internally. This might need you to outsource some of the projects. Before contracting out any activities or business operations, you should carefully consider the pros and cons of outsourcing.

Outsourcing in the business world is growing at a faster pace. You need to understand the benefits of outsourcing the business process and how it will affect the organization's culture. Every organization doesn't have all the essential in-house resources to run its business. That's where the concept of BPO came into existence. Tasks such as billing, content writing, and payroll can be outsourced to organizations that is specialized in handling these services. The cost spent on outsourcing is much lower than the amount spent on hiring and training in-house employees. Besides saving costs, BPO also frees your time and help you focus on core business activities. In addition, Invensis provides end-to-end customized back office BPO services across major business functions and industry verticals ensuring on-time fulfilment of tasks.

As we have seen the overview of the Pros and Cons of Outsourcing, the next segment will see the pros and cons of outsourcing.

What are the Business Effects of Outsourcing?

The effects of outsourcing on the business depend on the domain and the purpose for which the task was undertaken. Outsourcing is meant to assist organizations in generating more revenue and providing a competitive advantage.

During the outsourcing process, there are chances of either increasing or decreasing the turnaround time. And this could gradually result in decried or improved customer service. The process also results in easy management and better productivity.

Well! Let's discuss the pros and cons of business outsourcing and how it will affect your business.

Pros of Outsourcing

One of the major reasons to outsource certain parts of the business is to free up the available resources to focus on the core business areas or a lack of skilled employees. Knowing the benefits of business outsourcing will help you decide if that could work for your business.

Affordable than Full-time Employees

Outsourcing tasks like accounting and content writing is indeed proven to be much more beneficial rather hiring full-time staff for a process. Also, you will save on onboarding costs, compensation, and health benefits.

Focus on What Matters

Outsourcing tasks provides enhanced freedom. By giving supporting business processes to outsourcing agencies, the organization could focus on skills to improve the core business processes.

Targeted Efforts

Outsourcing allows the organizations to plan and implement targeted project campaigns that they would be able to take ahead alone. Thus, the business can take new risks and experiment with new techniques.

Focus on Managing Projects

When you outsource business processes via various freelance websites, you will have intuitive platforms to manage work that's being done and other aspects. In addition, most of these sites are automated and free up your time for important work.

Reduce Labor Cost

There are approximately 3,00,000 jobs outsourced to the U.S every year! Hiring those skilled employees for your work lowers the labor costs, taxes, and other benefits. In addition, outsourcing agencies have access to a larger talent pool, and you can find the right person for your job.

Reduced Administrative Expenses

While you

, you outsource most of the administrative tasks related to those processes.

Access to Specialized Skills

Instead of hiring professionals in several domains , it would be better to outsource tasks such as accounts payable, document management, and other such tasks to a group of specialists.

Global Scaling

Outsourcing manufacturing tasks can reduce expense, but allows you to connect with contractors, potential customers, and revenue streams. On the other hand, you will get an opportunity to expand your sales, and distribution and remove warehousing, and product lines.

Reduced Issues

The outsourcing process allows the business to stay away from issues that are quite difficult to control in-house , like union, licenses, regulatory, etc.

Cons of Outsourcing

Despite various benefits of outsourcing, there are some potential pitfalls that you need to be aware of:

Lack of Control

While you outsource the tasks to outsourcing agencies, there are chances of losing control over monitoring the tasks. However, as long as you know and trust the outsourced agencies for your work, this shouldn't be a great deal to handle.

Lack of Quality

It is good to receive the expected quality result; anything less than that will surely be disappointing. So, before outsourcing the tasks, you need to discuss and get clarity on the expected outcome. After all, you will be held accountable for a quality product to your customers. Thus, ensure to land up at the best outsourcing company for your business needs.

Security Risks

In cyber-attacks, it's essential to exercise caution while using customer data. While you are outsourcing business processes that require client's/customers' personal data, you are placing the privacy of your business at risk by handing it over to other people.

The Shift in Time Frames

One of the major disadvantages of outsourcing is the time zone of both the team and how you cope with your business requirements. It sometimes becomes difficult to synchronize various schedules to deliver products to customers on a reliable deadline.

Intellectual Property

While outsourcing your business, you must be extremely careful with your intellectual property and other confidential information. For example, a few countries don't care about your legal documents and might copy your product through their services without bringing it to your notice.

Conclusion - Pros and Cons of Outsourcing

While you plan to outsource any of your business processes, ensure to land up at a reliable BPO company. They need to possess expertise and experience to handle all the business processes effectively.

A positive work atmosphere leads to higher productivity levels. But, on the other hand, some ways can negatively impact the organization's culture.

  • Outsourcing might upset the employees with the feeling of being replaced
  • Employees being not aware of outsourcing specific tasks

Thus, organizations must safeguard against this before taking any step in this process. There are various pros and cons of outsourcing that you should consider. This could not be considered lightly; outsourcing can affect organizational culture. Invensis’ deep industry specific expertise helps us to tailor customized back office BPO services that match your business needs. We aim to enhance your service delivery excellence while ensuring compliance with industry-followed quality and security standards.

About Invensis

Invensis Technologies is a leading global provider of IT-BPO services with a reputation for excellence. Our carrier-grade infrastructure and commitment to empowering clients around the world to achieve business transformation and growth through our services sets us apart from the competition. With over 5,000 staff and more than 22 years of experience, our company has been providing quality services since 2000 from our Wilmington, DE office, with delivery centers in India.

Invensis delivers intelligent contact center and back-office functions for businesses. Invensis is an ISO 9001 and 27001 certified organization and has achieved HIPAA compliance to provide high-quality and secured end-to-end outsourcing services. We have a strong base in the USA, Canada, Australia, UK, Ireland, Germany, and other countries serving over 200 clients. Innovative processes and technological solutions drive Invensis, and it offers full automation from design through implementation and continual development—all while ensuring data protection. Our solutions tailors to help businesses achieve their strategic goals and help them become industry leaders.

Article by
Amy Pattinson

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