What is Outsourcing?
Outsourcing is a term from English that we can translate into Spanish as ‘outsourcing’.In the business world,
it designates the process in which an organization contracts with other external companies to take charge
of part of its activity or production.
The word, as such, is an Anglicism that is composed with the voices out, which means ‘outside’, and
source, which translates ‘source’ or ‘origin’, that is, external source.
In this sense, outsourcing is closely related to the subcontracting of services, since it involves the search
of an external source to the company that can efficiently provide certain services, so that it can have more
time to focus on the key aspects of your business. Many companies subcontract in the area of IT,
human resources, accounting and asset and real estate management. Others also do it in the technical
support to the user and the management of telephone calls, manufacturing and engineering. However,
outsourcing is a practice that must be very well analyzed before its application in a company, since it can
have both positive and negative effects.
Advantages and Disadvantages of Outsourcing
Depending on the type of business and its application, can present several advantages and
disadvantages that must be analyzed when considering the impact that this may have on the company.
Advantage
Among the advantages of outsourcing for companies, we can mention the following:
- It allows to reduce manufacturing and equipment costs.
- Place more human resources and technology at the disposal of the company.
- It gives the possibility to the company to respond and adapt quickly to changes in the business.
- It allows the company to focus on the key areas of its business.
- It allows the company to be more competitive.
Disadvantages
While, on the other hand, some of the disadvantages that outsourcing can present for a business are the following:
- costs may end up being higher than expected.
- The change of supplier company can be economically and productively negative.
- There is the possibility of losing control over production.
- The contracting company can see your work copied and your business damaged.
- It can contribute to the exploitation and dehumanization of the worker.
- In offshore out sourcing (subcontracting services for a company in another country, in order
to find cheaper labor), there is a higher probability of layoffs for workers.
