Advantages and Disadvantages of Outsourcing

BBA 3551 UNIT 7 DB
Name
Institution
Date
Advantages and Disadvantages of Outsourcing
Outsourcing provides financial freedom but also have some pitfalls. Companies seeking to outsource need to understand the advantages and the disadvantages of outsourcing, and how its benefits are outweighed by the long-term costs.
Advantages
Outsourcing minor activities including administration and other back office operation can help the organization focus on the main organization function for example sales and marketing. The biggest advantage of outsourcing is cost savings. This is because it offers lower cost of operation and labour .Outsourcing generally reduces overhead costs that usually are incurred on running back-end operations .Outsourcing not only saves money but other resources including manpower and time (Katz-Stone, 2000).
Disadvantages
One of the main concerns of outsourcing is its level of privacy. Even in a situation where partners outsourced are vetted the internal security process are still some of the avenues that data can be stolen or fraud can be committed resulting losses and reputation of the company .This poses as a risk especially when handl...