Outsourcing Meaning

What is Outsourcing:

Outsourcing It is a term from English that we can translate into Spanish as ‘outsourcing’, ‘outsourcing’ or ‘outsourcing’. In the business world, it designates the process in which an organization hires other external companies to take over part of its activity or production.

The word, as such, is an anglicism that is composed with the voices out, which means ‘out’, and source, which translates 'source' or 'origin', that is, external source.

In this sense, the outsourcing It is closely related to the outsourcing of services, since it involves the search for a source external to the company that can efficiently provide certain services, so that it can have more time to focus on the key aspects of its business.

Many companies outsource information technology, human resources, accounting, and property and asset management. Others also do it in technical user support and phone call management, manufacturing, and engineering.

However, the outsourcing It is a practice that must be very well analyzed before its application in a company, since it can have both positive and negative effects.

Advantages and disadvantages of outsourcing

The outsourcingDepending on the type of business and its application, it can present various advantages and disadvantages that must be analyzed when considering the impact it may have on the company.

Advantage

Among the advantages that the outsourcing For companies, we can mention the following:

  • Reduces manufacturing and equipment costs.
  • It places more human resources and technology at the disposal of the company.
  • It gives the company the ability to respond and adapt quickly to business changes.
  • It allows the company to focus on the key areas of its business.
  • It allows the company to be more competitive.

Disadvantages

While, for its part, some of the disadvantages that the outsourcing for a business are the following:

  • The costs of outsourcing they may end up being larger than anticipated.
  • The change of supplier company can be economically and productively negative.
  • There is the possibility of losing control over production.
  • The hiring company may see their work copied and their business harmed.
  • It can contribute to the exploitation and dehumanization of the worker.
  • In the offshore outsourcing (outsourcing services for a company in another country, in order to find cheaper labor), there is a higher probability of layoffs of workers.
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