Question

Briefly introduce the issues included in outsourcing.

Answer 1

Benefits of Outsourcing can be huge - from cost savings and efficiency gain to greater competitive advantage. However, it also has a lot of issues :

1.Slower turnaround time : Service delivery may fall behind time or below expectation.

2.Confidentiality and security may be get into risk.

3.Lack of flexibility ie contract could prove too rigid to make any changes.

4.Management difficulty: Divergent interests of the firm and suppliers could lead to friction.

5.Instability : Lack of commitment to the firm or industry can lead to the outsourcing company to go out of business.

6. In case offshore outsourcing, there can be barriers of culture, language and time zones.