As a small or medium-sized business owner, if you are considering outsourcing some of your business processes, it is necessary that you understand in detail the pros and cons of outsourcing.
When done for right reasons and with the right outsourcing partner, outsourcing can help you streamline your business processes, reduce your cost of doing business, and increase your profits.
The advantages of outsourcing substantially outweigh the disadvantages. However, before you form a strategic business alliance with an outsourcing partner you must learn all you can about outsourcing. This will help you decide if outsourcing is right for your business and how it can help you.
Following is a list of advantages and disadvantages of outsourcing:
Advantages of Outsourcing
- Gives you the opportunity to induce efficiency in those areas of your business in which you lack expertise and resources
- Gives you access to skilled services at low cost
- Reduces your cost of doing business, as you save on infrastructure, workforce, hiring costs, training costs, and technology and software investments
- Allows you to focus more on your core business functions – When you outsource, you are in a better position to use your manpower, time, and money to improve the efficiency and productivity of functions that directly affect your bottom-line
- Improves the overall efficiency of your business model, allowing you to serve your customers better
Disadvantages of Outsourcing
- There is a certain degree of threat to security and confidential information, as your outsourcing partner is likely to require access to sensitive information about your business
- To a certain degree, you lose your control over the business processes that you outsource
- Your outsourcing partner may not be able to maintain the high quality of standards your business process requires
- Your outsourcing provider may also be providing service to your competitors and there can be a direct conflict of interest
- In case your outsourcing partner becomes bankrupt or goes out of business, your business may have to bear a temporary setback as you will need to either shift the processes you outsourced in-house or find another outsourcing partner
Outsourcing can give your business the competitive edge it requires to move forward. As mentioned above, the advantages of outsourcing are far greater than its disadvantages. And, this is the reason why so many companies today outsource their non-core business operations.
If anything, the disadvantages of outsourcings give you the opportunity to think before-hand about the things you need to keep in mind when selecting an outsourcing partner.
How Advantage SBS can help you
Advantage SBS offers clients quality service and smart business solutions to take care of their non-core functions, allowing them to focus on what they do best; and that is running and growing their business. We provide an Administrative Services Outsourcing solution that includes business processes such as Payroll Processing, Human Resource Services, Workers’ Compensation, and Employee Benefits Administration.
To learn more about Advantage SBS or to speak with a representative about the benefits of outsourcing, contact us today at (888) 762-2075 or complete our online quote request form here.