Outsourcing: Benefits of Outsourcing

In the later part of 20th century, a revolution in the systems of communication, has brought about many modifications in the way business work. Never did Alexander Graham Bell realize the fact that his invention was a revolution, that would help people over long distances to talk with each other, but will also dictate the way in which businesses of the modern world would run. Had he known the significance of telephone, he would not have said the famous words, "...Mr. Watson...come here...I want to see you...", he would have yelled out, "...how much should be the price of this contraption's patent ?...". The telephone also did lead to the development of other very, very important inventions, namely the Internet and cell phones. Believe it or not, communications do dictate the way in which businesses are run nowadays. So what is the connection of communication with outsourcing. The concept of outsourcing does depend upon communication. This business activity literally means, 'communicating the work to a third party'. Moving on to outsourcing benefits and mechanism.

What is Outsourcing?

We can easily imagine a situation, where one has to pay through the nose to employ casual workers to do some simple jobs. Well, it kills the entrepreneur to pay a small fortune to hire people. Thus, many entrepreneurs have to turn to another option that is quite cheap, outsourcing.

Imagine that you want to order a pizza from a giant fast food chain, of course with the help of Bell's invention. A receiver will pick up your call and take your order. Half an hour later you will be enjoying a nice, steamy and delicious cheese pizza, on your couch, which has been delivered right at your doorstep. Have you ever imagined the process that takes place in between? Well, here's what actually happens, when you dial the said number, your call dives down into the sea, swims millions of miles through the ocean telephone cables, and is finally picked up by some Indian or Chinese person, who takes down your order. He then conveys the order to your neighborhood pizza outlet, along with your address. (example hypothetical, but possible)

Why divert the call to Asia, when the pizza outlet is in your neighborhood? Well, the equation is simple. Due to a very low population density, there are many countries, where cost of labor is beyond outrageous. Enterprises cannot simply afford to hire people to receive calls for your orders. Instead, it is very cheap to divert the calls to Asia or any other region where population density is high and labor is exceptionally cheap. There might be some economical, political or social sacrifices that are made by either the country that outsources or the one which does the outsourced jobs. There are many, many businesses that outsource such jobs, with some prominent examples being medical billing, ordering goods on the web, data entry functions, etc. Just like the normal outsourcing pros, there are many IT outsourcing benefits, that have been realized by companies, which has led to contracts of much higher value.

Positives of Outsourcing

As mentioned above that there are some specific pros and cons of outsourcing. Advantages of outsourcing, have been elaborated in the following paragraph.

• Economically Feasible: The first advantage of outsourcing is cutting costs. The cost sheet of any product is bound to show a low amount of 'service charges' when the calls are outsourced. Let us take the example of a pizza outlet. Imagine the pizza outlet employs 10 people just to receive and segregate the calls, at a quite high salary. The total cost of the pizza that you enjoy, thus bound to be high, as the salary of the call receivers is recovered through the cost of the pizza. Outsourcing the same jobs, to individuals who do it for a comparatively small amount of money is much better. The best merit, cheaper and better pizza.
• Segregation of Workload: The second merit, that I would like to emphasize, upon is the segregation of workload. In a scenario mentioned above, the employees of the pizza parlor do not have to worry about receiving the orders. The order is intimated to them through some reliable sources such as the Internet. This leaves them with the job of making the pizza and delivering it. The mechanism is also set in such a manner, that the address of delivery is very near to the outlet.
• Efficiency: The another merit that I would like to point out is the efficiency that can be maintained in the work. As pizza outlet employees have to worry only about the making of the pizza and its delivery. The segregation of orders according to geographical areas is done by people to whom the work has been outsourced. Thus, you will find an amazing pizza at your doorstep in a very short time period.
• Speed: Speed of delivery is one of the best merit of outsourcing. Benefits of outsourcing are often centered round costs. The speed of delivery, is a merit that is often ignored. Simple equation, the faster the delivery the more happy is the customer.

Thus, outsourcing benefits, indeed point out to one fact - outsourcing is indeed a good choice and is advantageous. Outsourcing benefits and risks are often opposed by equally justified arguments. But the fact remains, that outsourced tasks give cheaper goods, which means, happy customers.