Companies have tried to increase their competitive advantages since the Industrial Revolution. However, in the 1950’s and 60’s diversification and economies of scale became the new trend, and in the 1970’s and 80’s those companies who wanted to compete globally, were handicapped due to the complicated management structures that had come into place.

It was not until 1989 that outsourcing became formally recognized as a so called “business strategy”, and from the 90`s the areas such as those below became the focus for outsourcing.

Human Resources

Security

Office and Plant Maintenance

Accounting

Mail Distribution

Recently, developing partnerships and strategic advantages have been used as a means to get closer to the customer. For example some companies use outsourcing companies to handle their customer service department, since it is such an important portion of their business.

Advantages of Outsourcing

Even though the benefits of outsourcing are many, each project should be dealt with on an individual basis. There are many ongoing operational costs that can be avoided if you outsource and that should be taken into consideration, however it should be noted that any organization that outsources the work can reduce costs and be more flexible, more effective and more efficient.

Some advantages of outsourcing are:

Transfer of knowledge to permanent staff

Projects reach market faster

Experienced, creative and flexible problem solvers

Predictable and cost-effective means

Flexibility in staffing requirements

Access to more professionals

Focus is on competency

Disadvantages of Outsourcing

The negative side of outsourcing cannot truly be universally applied to all industries of all types. However, a few common situations that we can come across are:

Jobs may be lost

Employees will find themselves with handling new tasks

Staff may have to be relocated

Workload amount may vary before and after outsourcing

Change of employer may take place for the employee

Employees may have to relinquish some of their responsibilities

The problems and dangers with these is that some former or long time employees may not take to this new trend easily. Facing disgruntled employees is something you need to prepare for if you are considering outsourcing a very important function in your organization.

It does seem however that, outsourcing is more advantageous than not especially for companies that want to cut down on employee size and be more financially efficient and are willing to take the outcome of the exercise in their stride.

If you're new here, you may want to subscribe to my RSS feed. Thanks for visiting!

Outsourcing is a way by which a specific task, job or project is made available to an external agency which shows an interest and is equipped to undertake it. There are many ways in which a project may be outsourced.

They can be published through print media or electronic media. Of all the ways, one of the most effective of them all is the internet. Almost all of the countries are now connected through the internet though the percentage of people in each country having the facility may vary greatly.

Still, the internet can prove itself as one of the biggest leaders in providing outsourcing opportunities and consequently, many jobs as well.

Outsourcing may not always increase the number of jobs available although it is possible. The main purpose of outsourcing is to give many people a chance to show their skills instead of giving the project to a single group over and over again. Sometimes, a buyer may want the task to be done in a very short time.

In that case, the buyer can choose the option of dividing the workload between different groups so that the work may complete earlier than actually required by a single company or individual.

Although there may not always be a new job created, outsourcing can still serve a major advantage to both buyers and providers. Those who have yet to gain experience can take advantage from outsourcing and offer their service. This way they can get an opportunity to show their work and abilities and if the buyer likes the work, they may consider them again in the future for another similar task or maybe recommend them to someone else.

There are a number of institutions that offer a platform for outsourcing.

There are a number of websites on the internet which provide facilities which the buyers and service providers can use to outsource the work. Some websites also offer a facility of limiting the areas from where the people may offer their services. A buyer may choose not to use the services of a party residing in a different country.

These websites charge a fee for each project that is opened on the page. And the websites needs a crew to maintain it. So in this sense, outsourcing can also create jobs in this manner which may not have existed if it had not been for the various requirements of industries and individuals to get their work done quickly, economically and as per standards specified.

Companies have tried to increase their competitive advantages since the Industrial Revolution. However, in the 1950’s and 60’s diversification and economies of scale became the new trend, and in the 1970’s and 80’s those companies who wanted to compete globally, were handicapped due to the complicated management structures that had come into place.

It was not until 1989 that outsourcing became formally recognized as a so called “business strategy”, and from the 90`s the areas such as those below became the focus for outsourcing.

Human Resources

Security

Office and Plant Maintenance

Accounting

Mail Distribution

Recently, developing partnerships and strategic advantages have been used as a means to get closer to the customer. For example some companies use outsourcing companies to handle their customer service department, since it is such an important portion of their business.

Advantages of Outsourcing

Even though the benefits of outsourcing are many, each project should be dealt with on an individual basis. There are many ongoing operational costs that can be avoided if you outsource and that should be taken into consideration, however it should be noted that any organization that outsources the work can reduce costs and be more flexible, more effective and more efficient.

Some advantages of outsourcing are:

Transfer of knowledge to permanent staff

Projects reach market faster

Experienced, creative and flexible problem solvers

Predictable and cost-effective means

Flexibility in staffing requirements

Access to more professionals

Focus is on competency

Disadvantages of Outsourcing

The negative side of outsourcing cannot truly be universally applied to all industries of all types. However, a few common situations that we can come across are:

Jobs may be lost

Employees will find themselves with handling new tasks

Staff may have to be relocated

Workload amount may vary before and after outsourcing

Change of employer may take place for the employee

Employees may have to relinquish some of their responsibilities

The problems and dangers with these is that some former or long time employees may not take to this new trend easily. Facing disgruntled employees is something you need to prepare for if you are considering outsourcing a very important function in your organization.

It does seem however that, outsourcing is more advantageous than not especially for companies that want to cut down on employee size and be more financially efficient and are willing to take the outcome of the exercise in their stride.