May

3

An article discusses on how off-shore outsourcing of business processes to “low-cost” destinations may not be saving costs for an enterprise at all.

The article elaborates on hidden costs which businesses should be aware of when farming out work abroad.

Outsourcing Opinions highlights those hidden costs discussed below:

1. Poor service

Unsatisfactory services or services not up to value  lead to loss in efficiencies and productivity for the client company which in turn lead to the severing of offshore outsourcing relationships.

2. Risks of Corporate Fraud

Satyam. Need we elaborate further?

3. Legal tie-ups in doing business off-shore

There are certain destinations which do not share similar business regulations and standards which may incur more costs to ensure your business adheres to the local business-trade policies.

4. Theft of Intellectual Property

Companies that outsource to places like China which is notorious for taken certain liberties with intellectual property and reverse engineering.

5. Loss of corporate identity/integrity

How can a  company retains its corporate integrity after large portions of its inner workings, such as customer service and IT, are  farmed out?

Would you agree with the assessment of the article?  Is outsourcing more risky as opposed to rewarding? Could off-shore outsourcing be down for the count as a viable option for business?

Outsourcing Solutions, Inc. – your outsourcing partner!

Reference:

Baker, Pam. “The Real Cost of Off-shore Outsourcing.” 28 April 2009. CIO Website. Accessed 1 May 2009. Link here


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