Outsourcing – The Pros and Cons
If you are an entrepreneur of the internet age, you are probably aware of the importance of outsourcing in a business model. Several business owners depend on outsourcing for their day to day business processing. This clearly exemplifies that outsourcing is the buzz word in the market and it is here to stay. IT Outsourcing service, however, doesn’t prove beneficial in all scenarios. Just like any other phenomenon, outsourcing trend also comes with its pros and cons. This post explores the various positives and negatives associated with the very trend of outsourcing services to an offshore software development company.
The Pros Associated with IT Outsourcing:
- As you outsource a project, the overall cost associated with it reduces. The core reason for this is the involvement of foreign labor. Employing contracted employees is often cheaper as compared to hiring local labor. This allows owners and project managers to save on the overall cost of the project.
- If you outsource work through online portals like Freelancer and Elance, the process of project management is streamlined. It is to post projects and manage the outsource employees. The positions can be filled in a timely manner and it is easy to track the progress of each employee. Payment schedules and other deliverables can be handled in a hassle free manner.
- Your in-house team is free to take up new projects as your outsource your current projects to offshore software development company. This means you can grab on better business opportunities and harness them to earn better profits.
- Hiring and firing both get simplified with the help of outsourcing trend. Since you need not face your employs, it is easy to take harsh decisions like firing someone. Since you have a contractual relationship with the staff, you can do without the traditional human resource hassles. This gives the managers a reason to breathe a sigh of relief.
The Cons Associated with IT Outsourcing:
- As you outsource a project, always keep in mind the 4X rule. This rule simply states that as your outsource a project, it will take four times as much time to complete the project, as estimated by your or as quoted by the employee. This may be due to several different reasons, but is bound to happen most of the times. Thus, there is a constant delay in deliverables.
- As the business owner, your first concern is that your project must get the kind of attention that it demands. The outsource staff may or may not give a priority or dedicated attention to your project. As you are not physically present with the employee and just virtually connected, you can just hope that your project is getting requisite attention. Since the staff is sitting away from you, you can only expect and not be sure that they are not working on some other client’s project while cashing on your investments.
- There may be some privacy concerns. As outsource staff is not governed by the labor laws of your country, you cannot be sure about how they handle your data. Though signing an NDA might be a solution, but it cannot offer any permanent relief.
IT Outsourcing services may offer ample of alluring benefits but it also comes with its own set of fallacies. It is, thus, advised that as a business owner you must be very careful about your choice of offshore software Development Company.