From giant to modest ones, organizations from across the world are under immense stress to deliver value to their customers and thus embrace the challenges dished out by competition. In global village market, this is truer today than it was ever. Broadly, the factor that directly or indirectly contributes toward an organization’s business success is the cost of production and operation.
Among the many initiatives that have succeeded in reducing the cost of producing goods and services is the outsourcing/offshoring model. This model has taken many forms and its characteristics have been refined over a period of time.
Positive effects of outsourcing are concentration or focus on core business areas, get best of trade services on non core areas from specialized firms, world class technology and service at cheaper rates with attaching no strings, increased productivity, greater share holder confidence, tax benefits, more savings means more resource in hand for business expansion etc.
On the flip side lie security and confidentiality issues. We get to hear stories about customer information being sold by call center agents. Then there is less management control over series of things, outside contractors may take customers for granted and give them bad service, in the name of saving costs clients end up paying a lot of money as hidden costs keep popping up from time to time.
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