Niyamath Parveez

There is no doubt that when used well, outsourcing is a tremendous way for a firm to make cost savings and to gain valuable experience and expertise in certain key business areas. It would be perfect for a firm to have experts and market leaders in every department but in the ideal world this is not a likely situation and certainly not one that would be cost effective to obtain and maintain. Focusing on key strengths and then gaining the support and assistance of external partners is a key reason why outsourcing is such a strong tool for a great number of organizations. The financial benefit can never be overlooked when it comes to business, particularly in the current climate but sometimes there needs to be a greater awareness of the overall benefits to a business.

This means that when a firm is looking to outsource some of their workload or departments, there needs to be focus given to what experience and expertise the new partner will bring to the agreement as opposed to can they help slash costs. Criticism of the trend towards outsourcing focuses on the lack of personal touch that some business are able to apply to their customer base and a growing displacement from the everyday running of the industry. This is not the case for every firm but if payroll and inventory systems are completely outsourced and the replies and responses are limited, how can a firm react to any problems that arise with their customer base?

This is leading to a number of firms of placing a middle-man or conduit role or department in place to liaise with the outsourcing firm to obtain a better understanding of their work and how they progress the work. Many firms look to utilize the benefits of outsourcing as a way to completely remove workload from their main office and to reduce staffing levels but there may well be a trade off in quality and ability to fully respond to customer questions.

This extra layer of management and control may go against the principle of outsourcing to many people but to make an overall saving, this tighter control of systems is deemed to be vital for some industry experts. With modern technology updating at a rapid rate, the costs of maintaining software systems and computer hardware may inflate expenditure to such a level that savings on wages may be nullified and the company no better off. Being able to have someone in control at the outsourcing side and determining where and when the purchases of technological advances are required may be crucial to maintaining the high level of benefit that people expect from outsourcing.

The moral of the story is that, outsourcing remains a fantastic way to cut costs and get experience on board but it has to be done correctly and not just outsourcing for the sake of outsourcing. Like in all business deals, proper care and attention has to be done to ensure that any potential partner will provide benefit to both parties and that cost and quality benefits can be obtained.