Outsourcing

What is outsourcing? Generally, outsourcing happen when a business secures products and/or services from a third party, as opposed to producing them in house because of several factor. Outsourcing is not new  "term " for the services and manafacturing industries as many services and production have been transferred to the outsource company.

Actually, they are many argument occurs whether the company should outsource their products or goods to other party or not. Companies should think carefully before outsourcing because there is some disadvantage of outsourcing. Proper planned approach towards outsourcing need to take into account the interests of employees and customers alike to come up with balance advance.

Below are the reason why companies decide to outsource their product and services:

• Focus on core activities
• Cost savings
• Cost Restructring
• Improve quality
• Knowledge
• Contract
• Operational expertise
• Capacity Management
• Catalyst for change
• Enhance capacity for innovation
• Reduce time to market
• Commodification
• Venture capital
• Tax Benefit
• Scalability

Critism on the outsourcing:

• Quality Risk and services
• Loss of managerial control
• Hidden cost
• Language Skills
• Public Opinion
• Social Responsibility
• Staff Turover
• Company Knowledge
• Qualifications of outsourcers
• Failure to deliver business transformation
• Productivity
• Stanpoint of labor
• Security