What is outsourcing? Outsourcing is a business deal of two companies where one does service for another in some areas of work. What does that mean? This actually means that although one company may have the capability to do a certain job, it chooses to outsource this job to some other company, for a certain fee, because other company has better conditions, machines, manpower etc, and can provide this service with more quality and for less money. Company that provides this service is called provider and the one who needs something to be done is called employer. Several agreements are made between them, concerning time frame, quality, payment arrangement etc.
With the new age business, the need to get help in a certain task (in order to concentrate on more important things), has arisen and today many companies are organized in such way.
What Are the Benefits of Outsourcing?
• First, there is definitely more benefit for a company when its manager is focused on important matters, (instead of doing things others can do as well) and control employees.
• Then there is a question of money; provider is technically dominant in specialized area, has more experience and therefore can produce better service.
• Outsourcing can be just a step in breaking into foreign market. Offshore companies are practical example.
• Company can stay focused on their field of work and they don’t have to try to specialize in many fields but to be the best in what they do.
What Are the Bad Sides of Outsourcing?
• For one thing, there is the matter of security. If a company’s field of work is confidential or its work requires limited access, maybe it is not the best solution to outsource a job, but to try to organize a company in such a way that company can depend on itself.
• In certain fields, outsourcing would imply distancing from your customers.
• Since Internet is playing a major role in every business, there is a matter of lack of face-to-face conversation, and therefore loosing a real perspective on some things in a company.
• Of course, there are a lot of arguments for and against outsourcing; above mentioned are just some of them. The reality is somehow different. Today market is organized in a way that you have to outsource a job or you will be overrun. It is also true that a great majority of small business is also using this type of arrangement -so much, that this question was a matter of debate in a presidential campaign in 2004.