Outsourcing can provide considerable benefits to your company. However, there are a number of drawbacks that you need to be aware of in order to make a good assessment:
- Management & Control Problems
Effectively managing the operation of a department within your own company is challenging enough. Effectively controlling an offshore operation is difficult due to the geographical distance, time zone difference, and lack of face-to-face communication.
- Failure to Deliver
With external sources, you are trusting a third party to deliver a certain quantity/quality of deliverables. Should your provider fail to deliver, you are likely to suffer the consequences despite the Service Level Agreements (SLAs) you had in place.
Outsourcing exposes a certain part of your business to a third party. Unless you completely shield your offshore operation, you might expose your company to a breach of confidentiality, malicious use of system access, and other vulnerabilities in your organization.
- Negative Reputation
Outsourcing has gained a negative reputation and even though studies have proven otherwise, the general public opinion remains that offshoring eliminates domestic jobs. Your employees, clients, and partners might not appreciate the fact that you are outsourcing certain business processes offshore especially if it means that you are terminating a part of your domestic operation.
- Company Value
The major risk of outsourcing is that you may not be building the value of your company in terms of personnel, in-house knowledge, and infrastructure. In this case, the value of an outsourcing agreement with a provider will be less effective than an internal department.
At MicroSourcing, we understand the level of trust it takes to outsource a process to a third party. This is why our first step in setting up an outsourcing solution is properly analyzing your requirements to see how the benefits of outsourcing can be maximized and the drawbacks minimized.