CRO Advantages and Limitations
Dr. Vijay Prakash
The Advantages and Disadvantages of Outsourcing
• Organizations who are interested in
outsourcing are often curious to know more
about advantages and disadvantages of
outsourcing.
• By gaining insight about both the good and
bad of outsourcing, organizations can decide if
outsourcing is right for them.
• Most organization jump headlong into
outsourcing, without actually finding out if
outsourcing is good for their business.
• Before outsourcing, ensure that you are
aware about the pros and cons of outsourcing.
• The advantages and disadvantages of
outsourcing can help your organization decide
if outsourcing is right for your business.
• The following is a list of the advantages and
disadvantages of outsourcing:
The Advantages of Outsourcing
• Outsourcing your non-core activities will give you
more time to concentrate on your core business
processes
• Outsourcing give you access to professional, expert
and high-quality services
• With outsourcing your organization can experience
increased efficiency and productivity in non-core
business processes
• Outsourcing can help you streamline your business
operations
• Outsourcing can help you save on time, effort,
manpower, operating costs and training costs
amongst others
• Outsourcing can make your organization more
flexible to change
• You can experience an increased control of
your business with outsourcing
• Your organization can save on investing in the
latest technology, software and infrastructure
as your outsourcing partner would be
investing in these
• Outsourcing can give you assurance that your
business processes are being carried out
efficiently, proficiently and within a fast
turnaround time
• Outsourcin can help your organization save on
capital expenditures
• By outsourcing, your company can save on
management problems as your offshore partner
will be managing the team who does your work
• By outsourcing, you can cater to the new and
challenging demands of your customers
• Outsourcing can help your organization to free
up its cash flow
• Sharing your business risks is possible with
outsourcing
• Outsourcing can give your business a
competitive advantage as you will be able to
increase productivity in all the areas of your
business
• Outsourcing can help your organization to cut
is operational costs to more than half
• If you want your organization to stay ahead of
competition, concentrate on core
competencies and make use of the latest
technologies, then outsourcing can help your
organization achieve all this and more.
• In outsourcing, the advantages of outsourcing
are more than the disadvantages of
outsourcing.
The Disadvantages of Outsourcing
• At times, it is more cost-effective to conduct a
particular business process, rather than
outsourcing it
• While outsourcing services such as payroll
processing services and tax preparation
services, your outsourcing provider will be able
to see your company’s confidential information
and hence there is a threat to security and
confidentiality in outsourcing
• When you begin to outsource your business
processes, you might find it difficult to
manage the offshore provider when compared
to managing processes within your
organization
• Offshoring can create potential redundancies
for your organization
• In case, your offshore service provider
becomes bankrupt or goes out of business,
your organization will have to immediately
move your business processes in-house or find
another outsourcing provider
• The employees in your organization might not
like the idea of you outsourcing your
processes and they might express lack of
interest or lack of quality at work
• Your outsourcing provider might not be only
providing services for your organization. Since
your provider might be catering to the needs
of several companies, there might be not be
complete devotion to you and your company
• By outsourcing, you might forget to cater to
the needs of your valuable customers as your
focus will be on the business process that is
outsourced
• In outsourcing, you may lose your control over
the process that is outsourced
• Outsourcing, though cost-effective, might
have hidden costs, such as the legal costs
incurred while signing a contract between
companies. You might also have to spend a lot
of time and effort in getting the contract
signed
• With outsourcing, your organization might
suffer from a lack of customer focus
• There can be several disadvantages in
outsourcing, such as, renewing contracts,
misunderstanding of the contract, lack of
communication, poor quality and delayed
services amongst others.
• The disadvantages of offshoring give
organizations an opportunity to think about
what they are stepping into. However the
disadvantages of outsourcing are less than the
advantages of offshore outsourcing.
• When outsourcing, you might not experience
any of these disadvantages of offshoring, if
you find a reliable outsourcing partner.
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