Outsourcing – Is The Risk Too Great?

By Marie Flounoy
Outsourcing has tremendously changed the way business is conducted and is becoming the endpoint of market development in many companies. Outsourcing is implemented more than ever by companies and small businesses worldwide who aim to reduce costs by assigning work to outside suppliers (both domestically and globally), such as freelancers, rather than completing the work internally.
Since most work is done online, outsourcing has becoming the endpoint of business development. Although, the underlying concern is if outsourcing too much of a risk. What are the potential pitfalls? Is it the future of work? And, will it soon replace the current state of work affairs altogether?
The advantages of outsourcing
With the internet, apps and websites, outsourcing is seamless, swift, and immediate. You can receive high quality work with quick turnaround at minimum cost, compared to years ago. In fact, it doesn’t cost as much as the traditional means of conducting business affairs. Outsourcing eliminates hiring extra team members, labor costs, office space, materials, and overall time spent on project management.
This is a win-win not only for companies who outsource, but also the workers who perform the outsourced tasks. These people are known as freelancers, contractors, or remote workers. There’s been a rise in freelancing with the praise on its perks. Perks include the freedom to work from anywhere, passion projects, and even freelancing full time. The opportunities and advantages are abundant. However, there are some disadvantages.
The disadvantages of outsourcing
If you are outsourcing and prefer to micro-manage, lack online communication skills, or don’t have a strong recruiting system of bringing on freelancers, outsourcing can have disadvantages that can effect your business. Some disadvantages include quality of work, language barriers, operational mistakes, and more. With outsourcing, companies don’t have 100 percent complete control. There is also a chance that you will not know if the outsourced work is executed properly. Greater risks include, for example, if HR or finance services are outsourced—the risk of losing confidential data is high.
 
The problems with outsourcing today
 

Pricing

 

For a minimum price, you can get work done in almost any field in a matter of minutes. This is why many companies turn to countries such as India for outsourcing for lower rates. However, there are a lot of drawbacks to this approach since it’s a fact that “you get what you pay for.” Outsourced work for the lowest price does not guarantee that the outsourced work will be of the highest quality, professional, and on time. With outsourcing, there must be a balance between quality and quantity.

Data Breaches

 

When outsourcing projects that are confidential, consist of important data or intellectual property, data breaches can be of huge concern. Outsourced projects that go into the wrong hands can easily result in losing valuable data, a data breach or worseWhile the risk is omnipresent, it can be prevented by having solid operations for third parties and an action plan for potential cyber security issues that may arise.

Other Potential Issues

 

As more companies and freelancers get into the world of outsourcing, other problems include competition, abiding by supplier human rights, repetitional risk, transport time, and more.
If you’re new to the world of outsourcing, before even getting started, the number one question that should be addressed is : ”What is needed, exactly?” or “What is the end goal?” The answer to this question will make it easier to narrow down the choice of potential contractors and help to create a game plan to successfully meet the objectives of the desired end result.
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