What is outsourcing?:
Outsourcing is where
a company pays another company to help or do work for them. In many cases, the
outsourced work could be done by the company itself, but there are often
financial benefits in outsourcing the work. The most common jobs for
outsourcing are, call centres and E-mail services. These types of jobs are
normally handled by companies that specialise in those jobs.
Advantages of
outsourcing:
Well first of all,
outsourcing work to another country will save the company a considerable amount
of money. The reason for this is that in the UK, the minimum wage is £6.31. In
other countries such as India, it is much lower; therefore the company can then
pay the workers less.
Also, outsourcing
works will also give skilled people in other countries jobs that may be scarce
where they are.
Another advantage for
outsourcing work overseas is that things like health care and benefits don't
apply because they are outside the UK, which means more money in the company’s
pockets.
If the company is
looking to expand its business, outsourcing is a cheap way to start in other
countries.
Outsourcing is not
only overseas; you can outsource work within the country you are working in.
You are paying other companies to work for you. The reasons for this would be
that it's either cheaper, or the company you are outsourcing to, are
professional at the work they do, or they are perfect for the job.
Outsourcing work also
gives the company time to do other work that is of a higher priority, reducing
the stress on the company and the allowing them to meet the deadline for a
project or work.
Disadvantages of outsourcing:
When work is
outsourced to other countries it can cause many problems, for example, many
call centres are often Indian, which can cause a language barrier between both
the customer and the person working for the call centre. Also, in a different
country, they may have different terminology, so if you're trying to fix a
fault on your PC, but the keyboard layout is different, you will find it hard
to keep up with what they're saying.
Another problem with
outsourcing overseas is the time zone constraints, for example, if you give
work to say a company in the USA, from the UK, there is a 9 or so hour
difference, so the communication between the two companies will be small.
Due to companies
outsourcing, this is causing redundancies within the company because they are
getting people who will work for less to do the job. Although it's good that it
saves the company money its also bad because it means that more and more people
are becoming unemployed and claiming benefits.
If a company
outsources work to another company, there can also be a delay. I there company
who the work has been outsourced to has higher prioritised work of their own,
then it may take them longer to get the work done for the company. This means
the set deadline to meet may not be met resulting in many things, including:
wasted time (people will have nothing to do until they have received the work
from the outsourced company), money could be lost (if they're selling an item,
they may lose out on buyers), and customer dissatisfaction (they will lose out
on potential customer, therefore relationships with the customers will be
ruined because the company told them when it would be ready, but it has been
delayed by a few weeks or even months.
