Outsourcing Is an Appropriation of Particular Business

Outsourcing is an appropriation of particular business operations to a professional foreign service provider. (Haugen, Musser, & Lovelace, 2009, p. 34) Most often then not, businesses and organizations have trouble handling all aspects of a business process privately or in this case, domestically, and need to seek professional assistance elsewhere. Additionally, some processes do not need permanent in-house professionals, allowing for outsourcing to be the cheaper alternative. Once a job or assignment is outsourced to a service provider, (often foreign) the service provider will then assume responsibility for carrying out the tasks and maintenance of the business/organization's assets.

Before undertaking outsourcing and incorporating it into a business, it is important to understand the advantages and disadvantages involved in outsourcing. Outsourcing offers a number of benefits to a business/organization. It could also pose complications if not outsourced to a suitable service provider. The most commonly outsourced streams of business include: IT outsourcing, Manufacturing, and technical/Customer Support.

A couple of the key factors which led to a steadily increasing outsourcing trend are: lack of availability of expert laborers, availability of low-cost labor that does not hamper the quality of output, and the ability to focus on other vital business processes. (Johnson & Institute of Management (Great Britain), 1997, p. 75) These factors are the main reasons why most successful businesses outsource to different locations in the world. An example of this would be India and their experts in communication and technical prowess bundled into affordable financial packages. India is known for providing IT services and customer support to a lot of the electronic companies around the world. They provide what others can't at lower wages and costs.

Outsourcing a.k.a. Offshoring, has pros and cons to it. The advantages of outsourcing outweigh the disadvantages of outsourcing.The advantages of outsourcing start with quickness and expertise. Companies look for professionals who have a specific speciality or vendors who have certain equipment and technical expertise the business/organization does not have. It leads to a business conducting tasks faster and with higher quality output.

Another advantage is better focus on core processes rather than supporting ones. Outsourcing takes the guess work out of supportive processes allowing companies to pay more attention to their core processes. Risk-sharing or risk-analysis, tends to be the most determinant factor. Outsourcing specific components allows the company to assign certain responsibilities to the outsourced vendor. The vendor is a specialist so they plan the risk-mitigating factors more effectively. Another important advantage is a reduction in operational and recruitment costs, making it the prime advantage of offshore outsourcing.

The disadvantages of outsourcing involve potential risk of revealing confidential data. When an organization outsources for instance, Human Resources, Payroll, and Recruitment services, it generates a risk of exposure of confidential business information to a third-party. A second disadvantage is synchronizing the deliverables. If an unsuitable partner is hired for outsourcing, some of the common problem areas include lengthened delivery time frames, lower quality output and mismanaged responsibilities. These issues are better handled within a company than outside.