The Advantages and Disadvantages of Outsourcing

Outsourcing can either be a positive, negative or both influences at any organizations.  I have experienced both sides of the spectrum and I will share my thoughts and opinions about the matter in this blog.  Personally, I believe outsourcing can be part of healthy growing organizations and we see it in the world today with so many of the Fortune 500 companies using outsourcing to develop, manufacturing products.

The advantages of outsourcing are­­­ fairly straightforward; it provides cost-reduction benefits, it can assist in faster project completion, outsourcing allows for a higher level of expertise in a team, and the flexibility of forming a dynamic team.  Those are all great points and for the most part all those points do work in certain industry sectors, especially in the technology sectors.  From my perspective and familiarity, outsourcing is a double-edge sword where it can be an incredible asset in one hand and a hindrance in another.  I will discuss the disadvantages in the next paragraph but as a benefit with the right talent pool, meaning hiring a person with years of experience and understanding of the industry; the outsource talent can provide a great boost to the company’s bottom line and product throughput.  I have witness first hand at how superb product testing and quality assurance testing can be with the appropriate talent pool from outside the company.  Another gain that I have observed first-hand is through product development of outsourced teams.  There have been numerous development teams that I have been involved with that have demonstrated an excellent understanding of the product, the targeted customer and the development process and some of those teams were outsourced.  I think the main criteria in making sure outsourcing become a positive endeavor for a company is to understand the level of expertise the outsource team/individual is bringing to the organization.

The disadvantages of outsourcing and I can attest to a few of them myself are: coordination breakdowns between teams, loss of control over the project, conflict on interpersonal level between teams, and security issues.  I could not state the positives of outsourcing without mentioning a few worthwhile negatives and from my experience the biggest hindrance was always the communication breakdown.  Whether it was the language barrier issue or the time difference; communication played a huge role in delayed responses, feedbacks and or product design interpretation.  Projects can often times become delayed because of the lack of close collaboration between teams; when a response is required for a given issue the project can be at stand-still because of a pending roadblock that needs to be address before proceeding to the next development process.

Outsourcing can provide a major gain to an organization but often times it comes at a cost.  The most ideal situation is to make sure the positives outweighs the negatives when outsourcing is being incorporated in an organization.



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