“Outsourcing” does not ring as true with employees as does, say, “stock options.” Outsourcing is as abundant and widespread as it is controversial; it has long since expanded from industrial practices to things like web design and development. There are many stereotypes and assumptions surrounding outsourcing, many of which are either ignorant or highly distorted. Nonetheless, bonafide pros and cons do exist, and it’s important to understand outsourcing from both perspectives. Below I detail the primary pros and cons of outsourcing from a business owner’s perspective, but no doubt anyone part of a company considering, or already practicing, outsourcing will find them interesting. You can get more detailed explanations from this ultimate guide to outsourcing training course.
Pro: First, let’s talk about the difference between outsourcing nationally vs. internationally. The immediate assumption is that international work is cheaper, but this isn’t always the case. To begin with, it is legally more complicated to outsource overseas. There are also more than a few “hidden fees” that further drive up costs. But, ultimately, yes, the chances are quite high that outsourcing programming internationally will be cheaper than keeping it in the American family. In a black and white world, this is an undeniable pro.
Con: But before you ship all your work to Asia (there’s a stereotype for you), let’s talk about the cons of cost. Outsourcing IT to other companies in the U.S. is gaining in popularity. At first glance, this is surprising: IT work in the U.S. is never going to be cheap. But there is a growing consensus that you get what you pay for, and a growing dissatisfaction for the quality of work produced overseas.
That being said, if you’re all about profits, you can build your business quicker, easier and with less money with the proven outsourcing methods found in this outsource profit machine class.
Note: When I say “outsourcing nationally,” I don’t mean to fellow Silicon Valley companies. These are going to be unaffordable for all but the most profitable companies. I’m talking about regions of the country that you would never in a million years think were tech competitive: notably, the South East and Mid East. Highly skilled techies can be hired for well below market value. Plus, when you start adding up those hidden fees and realize the international savings aren’t quite as high as initially predicted, you’ll be more likely to invest in a home-grown quality product.
Timezone And Language Barriers
Pro: The infamous pro of outsourcing internationally is this: at the end of every day, you can process the entirety of in-house and outsourced work, make edits, send an email 10,000 miles away, go to sleep and wake up the next morning with a perfectly fresh and improved slate, ready to start the process all over again. This is almost too much to resist for anyone struggling with power addictions.
Con: Going to sleep and waking up with the work already done sounds ideal, and it is. What if you need work done immediately? Tech emergencies? Well, the tables are turned because your overseas work is sound asleep. There are also the difficulties of communication. As ridiculous as it may sound, language barriers still pose very real problems. That email you sent might need clarification, in which case an entire day can be wasted.
But outsourcing nationally has similar cons. Yes, flying across the world for occasional meetings is inconvenient, but flying coast-to-coast in the states isn’t a drastic improvement, especially in terms of money. Then we have the most ironic thing of all: many American companies outsource their work (read: your work) to subcontractors overseas. Need I say more?
Pro: At this point, I do not think that one exists. Nationally, you might be able to say that you do not have to worry as much about privacy, because the legislation applies equally to both parties. But it’s still a risk. If you’re determined to see the good here, check out this article that focuses solely on the benefits of outsourcing.
Con: Maybe because capital savings are so enticing, many people overlook this increasingly vital aspect of technology. Outsourcing work concerning IP and other valuable technology means that you are placing it in a country that likely has very different laws from America. How protected is your software? Your ideas? What happens if an employee overseas, who likely feels zero loyalty towards your company, decides to steal your IP? Does legislation protect you? How fun does a legal battle on the other side of the world sound?
Admittedly, risk can be minimized by drafting preemptive legal agreements, but it cannot be completely nullified. Individuals with unique ideas are especially at risk, so I recommend looking into training such as this outsource course that walks you through the steps to getting a website or mobile app built to your specifications.
Pro: The biggest pro of outsourced staffing is that it’s essentially non-existant. The company working for you has to deal with things like hiring, firing, recruiting, etc. Granted, you have to put your trust in their management, but this is a huge burden that becomes suddenly lifted when work is outsourced nationally or internationally. You can also sever ties with less emotional conflict; personal feelings aren’t as likely to get in the way of business (a pro or con, depending on your outlook). This makes it easier to move among companies.
Con: It’s the nature of the beast: you will not have as strong a relationship with outsourced work as you will with in-house employees. It’s as inevitable as a sunrise. This can have fairly serious consequences, as well. A constant worry of managers and business owners is that due attention is being paid to the task at hand. You have zero control over this when you outsource work. And again, those working at the outsourced company have absolutely no obligation to you; as far as they’re concerned, they’re working for a company that will never see them. Then there is the common fear that you’re being overcharged, or that the employees are billing you while they work on other projects.
So while you don’t have to worry about things like recruiting, you might ultimately induce stronger migraines worrying about employees you can’t control. If you need help deciding which businesses you can trust, get advice from this outsource-your-service-business course that teaches you how to give work away with greater confidence by choosing a well-suited contractor.
Pro: The only way that delivery of goods is a pro with outsourced work is when it arrives early or on time. As it turns out, this is extremely rare, especially overseas. The key idea in outsourcing is to find like-minded companies to work with. This goes deeper than the type of work they do. You need a company that shares your beliefs: quality over quantity? timeliness over quality? etc.
Con: When it comes to outsourced timeliness, there is a rule of thumb that goes by many names (the most common of which is the “4X” rule), but the main idea is the same: finding a timely company is like finding a needle in a hay barn. The 4X rule is generally taken to mean that work will take four times as long to complete as quoted.
Personally, I find this number mind-blowing, even borderline impossible. 4X is not something the average company can afford. In the startup world, things are changing so fast that speed is of the essence (the essence of survival). It might not be a bad idea to expand your startup repertoire. Check out this blog post on online business options for digital entrepreneurs.
I considered making this the first section of the article, because in a certain sense, should you even consider outsourcing work overseas if it is at odds with your sense of morality or patriotism? Maybe you can shrug this off without a second thought, but I know a lot of people struggle with sending work overseas when there are so many Americans scraping their way through life.
A counterargument claiming that work benefits poorer countries is not always accurate either. Much of the time, it is the owners of those companies alone who see any real profits. The employees are often underpaid and overworked to sickening degrees. I’m sure most of you recall the infamous Apple-Foconn issues? You can get a detailed overview from this Forbes article if not.
The truth is simply this: you never know what’s really going on when you outsource work, but this doesn’t mean that there aren’t thousands upon thousands of relationships that are benefitting on both sides of the deal, both morally and economically. It ultimately comes down to finding a company you trust, that shares your beliefs and that produces quality work. If you decide to take the plunge, check out this course that can help you use outsourcing to be more productive and profitable.