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Disadvantages Of Outsourcing

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Hello, as per your request I am writing this report to inform you on the advantages and disadvantages of outsourcing and whether or not you should implement this into your company. I thoroughly go through each point and explain why it is an advantage or disadvantage. As well as for advantages and disadvantages I will also explain how outsourcing can be beneficial for your company. By the end of this report I will give a recommendation on whether or not you should implement outsourcing into your company.

Advantages of Outsourcing:

With outsourcing implemented into your business it allows you to have more increased flexibility. Well basically with increased flexibility it allows you to “respond to shifts and shocks, new technology, unanticipated
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Outsourcing helps us in this situation because we can outsource manufacturing jobs that will allow us to get access to newer technology more faster than it would have taken us to do it in house, due to the focus and resources the manufacturing company can offer. In addition to increased flexibility another advantage to outsourcing would be the greater decrease in product/process times. If we outsource a job in accounting to an accounting firm we can expect them you have performed this job more efficiently than our company could. Reasons to believe this is because the accounting firm would have more resources dedicated to do the job rather than us hiring in house accountant. As well as the accounting firm having more resources than us we can expect the cost to be more cheaper. The cost would be more cheaper because hiring a company accountant would be more expensive compared to giving a contract to an accounting firm to perform a certain job for us. This can also apply in the supply chain sector of our company because “if we outsource activities in supply chain we can remove activities that …show more content…
So the first disadvantage to outsourcing would be hidden fees. Hidden fees can be costs that were not agreed upon the contract but somehow make their way into the business. An example of a hidden fee would be having an agreement with a certain vendor, but then wanting to them to do something else a year later. This would result in the vendor charging you extra because of the new addition of work. Another example would be outsourcing a manufacturing job to a vendor, but that vendor needed some new machinery in order to complete the task. In this situation the vendor would most likely charge you for the new equipment. Usually when companies deal with outsourcing they feel as if they have a fixed cost throughout the contract, but in most cases additional costs are usually gained throughout the process of the job. Another disadvantage of outsourcing would be the exposure to confidential data. In most cases vendors that deal with outsourcing are not only working your company, they may be working for other companies as well and can be exposed many companies confidential information. In most cases businesses must proceed with extra caution in order to make sure that data confidentiality is not put at risk and can be exposed to competing companies. Chen, Y., Dubey, P., & Sen, D. (2011) This can be protected through with agreements protecting a company's

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