Which of the following is true of outsourcing? quizlet
Outsourcing has become an increasingly popular practice in today’s business world.
Many companies outsource various tasks and processes to third-party providers in order to reduce costs, increase efficiency, and gain access to specialized skills and expertise. However, outsourcing can be a complex process that requires careful consideration and planning.
Pros of Outsourcing
Cost Savings: One of the main reasons companies outsource is to reduce costs. By outsourcing certain tasks, companies can take advantage of lower labor costs in other countries, as well as economies of scale that allow them to purchase resources and equipment at a lower cost. This can result in significant savings for the company over time.
Cons of Outsourcing
Loss of Control: One of the main concerns with outsourcing is that it can lead to a loss of control over certain aspects of the business. When tasks are outsourced, they are no longer under the direct control of the company. This can make it more difficult to monitor and manage these tasks, as well as to ensure that they are completed to the company’s standards.
Access to Specialized Skills and Expertise
Outsourcing also provides companies with access to specialized skills and expertise that they may not have in-house. For example, a software development company may outsource certain tasks to a specialized IT services provider who has expertise in a particular programming language or technology.
Communication Barriers
Loss of Control: One of the main concerns with outsourcing is that it can lead to a loss of control over certain aspects of the business. When tasks are outsourced, they are no longer under the direct control of the company. This can make it more difficult to monitor and manage these tasks, as well as to ensure that they are completed to the company’s standards.
Quality Control
Another concern with outsourcing is ensuring that the work being done by third-party providers meets the company’s standards. This can be particularly challenging when working with providers who are located in different countries, where quality control processes may be less well established.
Case Studies and Personal Experiences
Many companies have successfully outsourced various tasks and processes to third-party providers. For example, a manufacturing company may outsource its accounting and bookkeeping functions to a specialized provider, freeing up time and resources for other important activities. Similarly, a software development company may outsource certain programming tasks to a specialized IT services provider, allowing them to focus on their core competencies and deliver higher-quality work.
Research and Experiments
There have been numerous studies conducted on the benefits and drawbacks of outsourcing. For example, a study by Deloitte found that companies that outsourced certain tasks experienced significant cost savings and increased efficiency. Additionally, a study by the Hackett Group found that companies that outsourced certain processes were more likely to be innovative and responsive to changing market conditions.