Outsourcing Advantages And Disadvantages

By: Monalisa


The Real Cost Of Outsourcing

Outsourcing refers to the act of transferring specified operations of an organization to an external company. As far as outsourcing is concerned, the parent company and the service provider enter into a contract evaluating the rules and specific time period of outsourcing. When it comes to outsourcing investments, statistics can make you aware of the total cost of the ‘official bills’. But you will be astonished to see that final cost will preponderate your budget with more or less 65% more than the sum approximated. Outsourcing involves certain hidden costs.

The following passages deal with some forgotten costs.

 Work transfer

In case your work is to incorporate or make modifications in the already existent code, it is most probably that it will involve costs for training the vendor's staff regarding the existing applications. You might find this cost too much but those who have striven in a different way found that the cost of correcting the misunderstandings is much more in comparison to the costs ascertaining that the vendor’s staffs are aware of the work they are dealing with. You can also visit the vendor. But your visit to the vendor and comprehending the complexity of the job will take away much of your time, and the employees of both the parent company and the service provider have to be paid during the period. This adds to the expenditure with no return on investment.

 Communication costs

The parent company requires to communicate with the service provider during the ongoing business operations. And communicating with an offshore outsourcer can cost you a good sum. In the first place, it involves direct charges for telephone calls and any permanent leased lines for voice or data networks. The difference in time zones also includes indirect costs because you cannot expect employees making regular contacts on official matters after business hours and not be paid for doing so.

 Software Testing

It is fundamental that if a project is being carried out by a service provider then the examination of the resultant code requires to be thorough. You can easily ask the in-house staffs to settle and bugs that may be detected. But the task becomes tough when you are dealing with an external service provider or outsourcer, because it incurs extra cost. Software Testing calls for the participation of many people within the company, especially the users and IT experts who can better explicate the faults to the people of the outsourcing vendor. All these need extra time, cost and effort.

Thus, it can be inferred that outsourcing an operation is not as beneficial as it is thought to be. True that it saves on recruitment and training, but it involves several other costs that make a remarkable difference to its effectivity.

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Monalisa Boral Maitra is the Business Development Manager of hire webdesigners, an India based company providing professional and affordable webdesigners,whom you can hire monthly, weeakly or Hourly basis.

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