Advantage and disadvantage of outsourcing

Q. 8 – Advantage and disadvantage of outsourcing.

Ans:- Outsourcing is a process that could be performed by employees within an organization, but is instead contracted to the third party for a significant period of time.

Advantage of outsourcing-

1. Focus on core activities.

2. Reduce the company’s risk exposure to changing technology.

3. Reduce overhead cost.

4. Can be performed better by out side specialist.

4. Operational control as streamlines.

5. Obtaining higher quality services than internal sources.

6. Improving the company’s ability to innovate

7. Enhancing the firm’s strategic flexibility to customer needs & market conditions     suddenly shift..

Disadvantage of outsourcing-

1. Loss of managerial control

2. Hidden cost

3. Threat to security and confidentiality.

4. Tied to the financial will- being of another company.

5. Bad publicity and ill-well.