Niyamath Parveez

Although the downturn in the economic and financial market has been very well documented, its impact on outsourcing has not been as straightforward as many people would have predicted. When the realisation of the financial situation hit many firms, there was a quick move to reduce all unnecessary costs and outlays and the short-sighted approach of this would have led many to think that out-sourcing was a luxury that many firms couldn’t afford. After all, with many firms having to lay off employees in order to remain viable, would it not be better to utilize the existing workforce to complete tasks rather than outsourcing work?

The unfortunate issue with this argument is that there is a huge emotional attachment to the argument which can cloud many people’s opinions of it. If it came to any other factor where a business or organization could make considerable cost savings but with no loss in quality, there would little to no objection to this new method being pursued. However, when it comes to outsourcing in a time of financial cut-backs, the benefits of outsourcing need to be re-iterated and not only focused on the financial element.

When any market becomes more competitive, all the factors of the product or service will be evaluated, not only price. This means that the quality and delivery are as important in the final decision making process for business and customers and this is where outsourcing can provide an advantage. Many of the tasks that are created in-house may be completed by staff members who have no natural talent ort flair for a task and this can result in the quality of the product or service being poorer. With outsourcing enabling organizations to tap into the experience and knowledge of suppliers who are regular providers of their service, there is a better chance to obtain a quality service or product.

The cost of the outsourced product is likely to be of benefit and it should be remembered that outsource suppliers are subjected to the same economic climate and conditions as the rest of the world. Virtually every firm or organization is tightening their expenditure and looking to take on a greater workload and this increased competition is creating a far more attractive element to outsourcing. With outsourcing firms engaging in a price and/or quality war to entice organizations to work with them, the opportunity to significantly lower costs should not be overlooked by any manager or purchaser.

The human cost during tough economic times is invariably high and can be extremely difficult for small to medium sized firms where the staff behave more like a family than a business. However, the longetivity of the business and the livelihoods of the entire workforce need to be considered in all decisions and this is where the benefits of outsourcing can vastly outweigh the negative aspects. This means it is vital to employ an almost removed sense of balance to the decision making process but in a time when so many firms and organizations are folding due to financial difficulties, realizing the benefits of outsourcing and embracing the financial and quality benefits that occur may be enough to greatly improve an organizations chance of survival.