Negative Effects of Outsourcing

Having to deal with outside parties can also be difficult and unmanageable.  As you try to outsource, you need to be cautious of the partner you would be dealing.  Your business future is at stake with this partner.

To outsource is a decision that you must carefully think about.  Should you decide to outsource, you should have ready at hand to identify your fundamental principles for discussion to your outsourcer,  At the outset, it is necessary that relationship is harmonious and clear to both of what expectations are to be met.  Unsatisfactory relationship could result to early termination of agreement or contract.  One cause of failure in an outsourcing relationship is when the buyer (owner) dictates to supplier (outsourcer) of what the services and performance levels should be.  The buyer lays down the expectation, the supplier process. 

Another con of outsourcing is the buyer s failure to control the quality of service. The buyer awaits the finished product and hopes that they are of better quality.  The buyer loses control of hiring the best-qualified people to perform the job.  Outsourcer does have the tendency of hiring less qualified people to perform the job, thus reducing cost at their end.

As others see the benefits of outsourcing as reducing cost to the company, they fail to realize that productivity is lost as well.  While you can invest on productivity of improving your product or service, the knowledge and skills, which are your intellectual property, are passed unto others.  This allow other countries where outsourced is done to gain more skills and apply them to their other clients, which could also be a competitor of yours now or in the future. Give a careful thought about outsourcing and its effect to your business.