Question

Fund of operation manegement

1. identified the advantages of outsourcing

2. List the risks of putsourcing

Answer 1

The benefits of outsourcing are as follows:

• Provides the organization skills and expert personnel.
• It helps in concentrating the organization on better things like expansion or improving the technology.
• It helps in cutting costs for the home company and increases the revenue and profits for the business.
• It allows the company to run its business 24x7 and provides the staffing flexibility for the company.
• It helps in providing a good service to the customers and increases the efficiency of the business by delighting the customer.
• It improves the in-house business by focusing on core activities.

The disadvantages of outsourcing are as follows:

• The company can lose control of some activities of the business which are outsourced and hence if something goes wrong with it the company will be blamed for it.
• The risk of backlash from the public is always there if certain service turns out to be bad for the customer which was outsourced.
• There are hidden costs in outsourcing which are known later on. Overheads costs are increased.
• There can be a reduction in the quality of the products or the services of the business. There can also be security issues once the part of the business is outsourced.

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