Outsourcing Pros and Cons List

If you thought of one of the dirtiest words in business sense, chances are the word ‘outsourcing’ would come into mind. Some may resent it, while countless business owners may shy from it and many entrepreneurs count on it. No matter which side you pick, it is worth knowing that outsourcing is there and it’s not going anywhere anytime soon. Why so? Because there is just so much to love about delegating different business functions to somebody else.

If you are entrepreneur in this very hyper-competitive market, outsourcing can help accomplish many tasks. Whether it is design, programming, research, data entry or whatever you name it, there’s always a huge market for specialized skills at your disposal.Leveraging on the different talents and trades of others who may be distant from your location has numerous benefits. On the other hand, there are also drawbacks that come along with outsourcing.

List of Pros of Outsourcing

1. Reduction of Costs
This is probably the most influential factor of outsourcing. It is cheaper than sourcing foreign labor and times than using local talent. Outsourcing enables entrepreneurs to contract freelancers as opposed to hiring part-time and full-time employees.

2. Holiday Schedule and Time Zone Factors
Imagine your team working while you’re sleeping. Because of the different geographical locations from where your staff is outsourced, it’s likely that they will be working on the opposite end of the word. In essence, your office will be closed, but your company still running. Web development, data entry and support staff can be easily accomplished via outsourcing. In addition, a significant portion of your outsourced staff may not be familiar with U.S. holidays, and therefore your company will remain open on the 4th of July, Easter, Christmas and during other public holidays.

3. Post and Manage Projects Easily
When you use services like Freelancer, VWoker, Elance, Odesk and others similar, they organize and streamline the management of your staff. You can easily post a project and get the positioned filled in timely fashion. The management processes of deliverables, payment schedules and project cancellations can be done effortlessly though these internet-based tools.

4. Distant Relationships Mean It’s Easy to Replace or Fire
Let’s face it, working with different people doesn’t always mean things will go the way you planned. A contractual relationship means the employer has greater freedom to fire or replace employees without having to go through the traditional HR way. With outsourcing, issues like personal feelings or sentiments won’t get in the way because the relationship is guided and developed in a contractual capacity of work.

List of Cons of Outsourcing

1. Constant Delays in Results
One thing that you’ll quickly learn when working without outsourced staff is that project completion will inevitably trail behind. This normally occurs due to variety of reasons such as miscommunication, communications lags, errors in implementation and so on. It’s one non-constructive aspect of outsourcing which is unavoidable.

2. Privacy Concerns and Intellectual Property
In the United States, rules, laws and regulations always apply. When you contract people from beyond domestic borders, such as the case when outsource foreign manpower, you need to pay close attention to privacy concerns and intellectual property. Intellectual property and privacy rights are things that cannot be closely monitored when your outsourced employees reside in countries that don’t conform to American laws.

For instance, say you’ve launched a software business. And part of that software is being developed by a team based in China, where you are gaining massive cost efficiencies of what you’d normally pay in the United States. However, as the project continues to gain widespread momentum, one of the programmers steals your code and uses it commercially. How do you take action?

Although there’s always ways to mitigate such risks, the crucial premise of such an example gets complicated and can only be avoided coming up with legal agreements or totally not outsourcing at all to ward off such issues.

3. Losing Focus on Your Project
As an entrepreneur, one of the biggest challenges you are likely to encounter is making sure that your outsourced workforce is paying significant attention to your projects. Because your staff is only contracted on a part-time basis, you can only pray and hope that they are also giving your project the same top priority. This is much different to a situation where you have in-house employees with which you can constantly monitor.

When an outsourced team member is working faraway, it is often difficult to ensure that projects are on course and that they are not working for different clients at your expense. To safeguard your interests, come up with daily checkpoints as well as weekly milestones so as to ensure that projects are performed and completed efficiently and accurately.

4. Personal Conflict
Not many people will agree with this final con about outsourcing, but if you did give full thought you would reconsider. At a time when the U.S. economy is rocky with unemployment rates plaguing local and foreign markets, by outsourcing to cut costs you are preventing another American from getting employment.