Considering the Pros and Cons of Outsourcing

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According to new research by Radiant Insights, the global outsourced customer care services market is forecast to exceed $84.5 billion by 2020, which means you can’t ignore its impact on your – and your competitors’ – business. If you’ve been considering outsourcing front- or back-office processes, whether customer care services, payroll, sales and marketing or product development, it’s imperative to compare the pros and cons.

Outsourcing Advantages
Companies like Alibaba, Google, Skype and Whatsapp have all realized the benefits of outsourcing:

  • No Hiring: Outsourcing allows you to pay for the services you need on a contract basis. For this reason, you avoid bringing more staff on board, which saves money on everything from benefits and training to office furniture and overhead.
  • Larger Talent Pool: Usually you have access only to a small, local talent pool when hiring employees. But through outsourcing, that pool can be a veritable ocean, which is particularly attractive when looking for specialized talent.
  • Lower Labor Cost: While every business has its own goals in mind when choosing to outsource either front- or back-office services, many are banking on lower labor costs. Although you need to be aware of the risk of trading quality for cost, outsourcing often provides the best of both worlds.

Disadvantages of Outsourcing
There are obviously many benefits to outsourcing, but be sure to consider some of the potential pitfalls before deciding to commit.

  • Communication Issues: This is one of the biggest potential downsides of outsourcing, but it’s also relatively easy to manage by asking key questions upfront. How does the outsourcing vendor’s business hours align with yours, such as being located in a different time zone, for example. What methods of communication work best for you and your business – email, phone calls, text, a combination? Be clear about your preferences upfront. Most professional outsourcing vendors will work with you to ensure communication is clear and timely.
  • Quality Issues: The biggest benefit of outsourcing is the cost savings, but those can be quickly lost if you receive poor quality from vendors. As with communication considerations, address quality expectations clearly and early in the process of vetting outsource vendors.
  • Lack of Control: Because you are hiring a contractor rather than an employee, it’s important to understand that this comes with some loss of control. Of course, you still provide direction in regard to goals and results, but because outsourced staff aren’t on site, it may be difficult to match the level of control you desire with what is realistically possible.
  • Company Culture: Any conversation about outsourcing must include a consideration of how it may potentially affect your company as a whole. Again, benefits can quickly be lost if you have a workforce that feels confused, slighted or unappreciated, since a positive culture means higher productivity. It’s usually a good idea to discuss any outsourcing you’re considering with employees early in the process. By being transparent about the reasons why, such as increased profits that can benefit everyone, you can get buy-in that’s necessary to make the project a success.

There are many considerations when it comes to outsourcing any business process. Ultimately, the decision comes down to your business’ unique situation, needs and goals. With decades of experience, Ansafone has the expertise required to help you navigate this business trend in order to determine if it’s right for you. Contact us today to learn more about how outsourcing can help grown your business to new levels of success.

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