The Pros And Cons Of Outsourcing

Submitted By ansonyang1025
Words: 310
Pages: 2

Controlling cost is a timeless theme for companies. With the same income, lower cost means higher profit. In today’s globally interconnected economy, many companies are able to move their domestic business operation to oversea, such as China, India and other developing countries, to lower costs. This business strategy is called outsourcing. When the concept of outsourcing was first introduced, only manufacturing companies try to outsource their jobs to other companies. But it is now common in a wide range of business activities. The total number of U.S. jobs outsourced in 2011 is 2,273,392. In 2011 the revenue of global outsourcing market was 95 billion U.S. dollars compared with 45.6 billion in 2000 . In many cases company itself can perform the tasks that are outsourced, but there are various advantages brought by outsourcing, such as the low labor cost, less governmental regulation, specialized tools and facilities and trained personnel. In addition, outsourcing peripheral activities to other organizations allows companies to narrow their focus on the company’s core mission and strategic directions. However, any business plan has risks because the future is always uncertain. This is also true of outsourcing. Whenever there is an outsourcing decision, there is an inherent risk associate it. In many cases, there are many hidden costs, unexpected outcomes and lack of management involved in outsourcing. The relationship between clients and vendor can