Recently “Call Centers” have mushroomed in countries like India, China, and Philippines due to the outsourcing by many Western countries. What are the benefits and disadvantages to this method to the company that is outsourcing? What factors should be taken into account when deciding to outsource?
Advantages and disadvantages of outsourcing
It is a cost cutting strategy that different companies used to attain the economy of scale for the business. It is a process in which companies shift their work assignments or production jobs to another company for reducing their overall operational cost. When work moves to another country, it termed as offshoring used to reduce the impact of the intense competition exist in the market. It also helps the businesses that are under pressure to lessen the cost of their products. Asian countries like China, Philippine, and India are low wages countries for the manufacturing. It offers great flexibility to business as well as making the consumer unaware of the origin of the product or service. In the case of Call Center a direct connect settled between the service provider and receivers. Call centers are involved in the telemarketing. Other task involved completing tax returns, drawing up charts, manufacturer blueprints or reading medical charts all done lowest most cost as compared to the expense of these services in the home country.
Factors are taken into Accounting
However, when deciding to outsource, it should be borne in mind that careful analysis of all the factor should be done first. It might be because saving cost is not the only factor behind the success or failure of the product. It also requires consideration of managerial vision, conditions, logistics, needs, and political factors, the infrastructure of the country and rates of foreign exchange. Make a comparison between the direct labor and total product is taken into account before formulating a sourcing strategy.