Pros and Cons of Outsourcing

Outsourcing has been an ongoing quarrel between those who support the decision to outsource and those who do not. A business looking to cut costs will eventually consider outsourcing as one of their options. A business must weigh the pros and cons and take into consideration other factors than just the benefit of reducing costs to determine if outsourcing is right for them. Without the proper research and time it requires in making this decision a company may face adverse effects on its balance sheet and income statement.

Although the major advantage to outsourcing is cutting costs there are other benefits. It can allow a business to focus on its core business activities. Concentrating on its core competency will help the company when dealing with its competitors. Also, the business process and workflow are known to improve as a result of outsourcing. Corporations will have access to highly skilled professionals with talent in areas that in house employees may not have for significantly lower costs.

The consultants brought up valid points pertaining to outsourcing and its risks when discussing the case with Wolter Kluwer. When a company thinks to outsource they must consider the political risk and corruption some of these places have. The issues that can arise from misinterpreted contracts can lead to poor results. Language barriers, cultural differences and security issues are all areas that can negatively impact the company’s choice to outsource. The company somewhat loses its control over the operations which can be potentially damaging.

Outsourcing is a very sensitive topic and I don’t exactly have a firm opinion on it. I feel that although it can be damaging to the economy and increase unemployment rates, it can also be boosting the economy. Economically speaking with time it can be described as one big circle. These companies who increase their profits will in more than one way invest back into the economy, which can eventually have a positive...