Question

What are the benefits and risks of outsourcing?

Answer 1

Benefits:

Simplification - reducing the number of activities performed in a business

Efficiency and costs savings - cheaper labour costs, regulatory differences and skilled labour in offshore locations
Increased process capability - improving technology
Increased accountability - KPI targets

Risks:

Paypack periods and costs - this refers to how long it would take to pay back a businesses costs when outsourcing
Communication and language - you don't want a Russian talking to you over the phone trying to figure something out
Loss of control and standards - when a business opts to outsource it can often lose control of standards and control of the activities being undertaken