Author Box
Articles Categories
All Categories
Articles Resources

Business Outsourcing: Its Advantages And Disadvantages In The Business World

February 28, 2012 | Comments: 0 | Views: 206

Business outsourcing has advantages and disadvantages in the world of modern business. It is also called as contracting out and is confused with off shoring. Basically, the company looks for a cheaper source of service to free up time, personnel and cash. This way, the company can save at the same time distribute the advantages. Also, the company will be able to concentrate on their forte and will have better results. Average unit cost will be reduced because the company will contract out the payroll, legalities, data processing, and manufacturing. This outsourcing is also a significant part of re-engineering and downsizing in a company.

The advantages of this business method will be further discussed. A certain company may have a contract with another company that will involve exchange of payments and services. Through this, both companies will benefit because they have the opportunity to focus on their respective competency. The advent of technology makes this outsourcing more possible. It now involves the World Wide Web, thus weaving a pool of talents from any part of the continent.

The virtual business aspect of it might be permanent or temporary that makes use of expert employees. Small businesses act as contractors that will collect the product or a service that will later be sent back to the company for repackaging until it will reach the target audience or consumers. The law of leveraging is incorporated in this concept. Even the raw products or services came from a remote place; it will still be met halfway by using technology. However, the down side is, the services are promising and high quality but they can only be paid in a reduced amount.

The company will have an advantage with cost savings and will be focused on the core business. Cost restructuring will be made possible in terms of fixed costs and variable costs. It will have an improved quality and increased acquisition of intellectual knowledge that are contract-binding. Operational expertise will be answered by the outside party as well as access to a larger pool of experts especially in science and engineering. Being a catalyst for change is something to be proud of. Capacity management will be answered by the supplier and not the outsourcer.

When the company is confined within its four walls, they might be closed for change. However, when this business phenomenon is utilized, there will be greater chances of innovation. It will also give the company a reduced time to market as well as excellent commodity analysis. Venture capital will benefit the country of those with small businesses and will eliminate worry about risk management because of better mitigation. Tax benefit will also be a bonus from the receiving country. Scalability, revenue, and liability are also vital in keeping up with outsourcing. Lastly, companies might as well make use of this innovation to increase their leisure time to reduce time for work. Through this, employees and businessmen will both enjoy time and freedom and will feel rewarded for a job well done.

Andre B. Reynolds is a leisure writer who enjoys sharing information about building janitorial services Los Angeles and janitorial companies in Santa Monica as well as other interesting topics.

Source: EzineArticles
Was this Helpful ?

Rate this Article

Article Tags:

Business Outsourcing


Business World


Virtual Business Aspect

In India, employment opportunities are set to grow by a good margin in the coming year, a phase which was started in the turn of the second decade of the 21st century. organisation, candidates with

By: Sarkariexam l Business > Careers Employment l April 01, 2013 lViews: 11713

Sometimes it is amazing to see that certain jobs can precipitate huge turnouts in the recruitment drives. It is as if thousands of people were waiting for the vacancy advertisements and the moment

By: Sarkariexam l Business > Careers Employment l December 30, 2012 lViews: 690

In recent times, jobs in healthcare segments have grown tremendously. It is anticipated that this growth curve will continue for the times to come. Various factors are responsible for this

By: Sarkariexam l Business > Career Advice l December 27, 2012 lViews: 449

Are you in a dilemma whether to choose web based CRM or not? If yes, don’t worry. You aren’t the sole person having this doubt.There are numerous firms trying to make out whether investing in a

By: Reneta Vasileva l Business > Customer Service l December 23, 2012 lViews: 410

If you think about it you will realize the fact that each business has its own set of risks that are involved in it.The trade secrets that you have and the information related to the business is what

By: brumbrum1 l Business > Risk Management l December 23, 2012 lViews: 264

As the time is changing, concierge management services are now growing despite the slowing economies of the world. The main reason of it is the need that is highly specific to the people who like to

By: willsmith10 l Business > Management l December 23, 2012 lViews: 334

Does outsourcing call center telemarketing make sense? We’ll explore further to find out. Learn more about why it makes sense to consider outsourcing your call center telemarketing services. We

By: daisyalicel Business > Outsourcingl November 27, 2012 lViews: 153

If you are trying to save money without depleting quality, customer service outsourcing can make sense. Find out the top six reasons why in this article.InSO is the industry leader in providing

By: sandra88l Business > Outsourcingl October 25, 2012 lViews: 207

Making a good first impression with clients is always an important goal for businesses, especially if you are running your own solo law firm. Here is how a call answering service can help your solo

By: Elizabeth L. Robinsonl Business > Outsourcingl April 27, 2012 lViews: 183

There are different options when it comes to an elevator company. Look to see what you should avoid.

By: Andrea Averyl Business > Outsourcingl April 26, 2012 lViews: 187

Online bookkeeping companies are now increasing in number. This is because the demand for their services has surged as more and more businesses are recognizing the better benefits they provide in

By: Jimmy Coxxl Business > Outsourcingl April 25, 2012 lViews: 201

Facility management can develop and maintain a variety of services throughout the entire life of a business. Businesses can include physical units such as complexes, buildings, schools, banks,

By: Natalie Eastaughl Business > Outsourcingl April 25, 2012 lViews: 204

Today, medical malpractice is a major discussion. With the rise of the best medical institutions, future medical practitioners are trained to become competent. They are given the most attention. They

By: Andre Reynoldsl Legal > Medical Malpracticel March 29, 2012 lViews: 156

Business management is indeed a key for an effective company. Running a certain company will be a piece of cake if this management style is mastered. This holistic approach consists of controlling,

By: Andre Reynoldsl Business > Managementl February 28, 2012 lViews: 175

A small business is considered as another conventional path to reach success. The definitive sign of this kind of business is expressed by the name itself. Basically, the business may be owned

By: Andre Reynoldsl Business > Small Businessl February 28, 2012 lViews: 170