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Outsourcing Pros and Cons – Essential Guide to the Key Pros and Cons of Outsourcing for SMBs

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Outsourcing Pros and Cons – Essential Guide to the Key Pros and Cons of Outsourcing for SMBs

Most discussions about outsourcing pros and cons implicitly center on big businesses and ignore small and medium businesses altogether. But since outsourcing is no longer the exclusive domain of vietbao con big businesses – thanks to companies like Elance and Odesk, small and medium businesses have begun to reap the rewards of outsourcing – a discussion about the pros and cons of outsourcing that are unique to small and medium businesses is certainly timely.

General Outsourcing Pros and Cons

Before we take the discussion about outsourcing pros and cons to arena of vietbao con small and medium business, it’s useful to review a list of the general pros and cons of outsourcing that people are most familiar with (and that are most commonly associated, as suggested, with big business).

General Outsourcing Pros and Cons: The Good

 

  • Access to cheaper labor
  • Reduced operating costs
  • Reduced labor training costs
  • Access to a global talent pool
  • Access to specialized skills
  • Capacity management
  • Fast-turnaround for project-based work
  • Capital cost avoidances
  • Access to superior technology
  • Performance-based business model
  • Increased productivity
  • Focus on core business
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General Outsourcing Pros and Cons: The Bad

 

  • Loss of direct control over part of your business
  • Company employees feel threatened
  • Difficulty in managing outsourcing provider
  • Language barriers
  • Financial stability of the outsourcing provider
  • Lack of “ownership” of the work being done
  • Possible negative impact on company customers

 

Obviously, neither list is a definitive list of the pros and cons of outsourcing in general. Nevertheless, they do represent some of the more commonly discussed and debated issues and should serve to at least provide some context when it comes to the pros and cons of outsourcing at the small and medium business level.

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Pros and Cons of Outsourcing at the Small and Medium Business Level

While small and medium businesses face many of the same outsourcing pros and cons as big businesses, there are some distinct differences – owing largely to the nature of the “new breed” of outsourcing solutions providers (they’re online), the scalability of their solutions, and the type of outsourcing work they can handle.

Small and Medium Business Outsourcing Pros and Cons: the Advantages

 

  • Access to a wide variety of general and niche online outsourcing solutions providers
  • Easy (and free) account set-up and management
  • Access to a wide range of specialized skill sets and levels
  • Tens of thousands of contractors to choose from
  • Access to contractors willing to work on short-duration assignments
  • Ability to collaborate with team members
  • Deep visibility into work in progress
  • Pay only for productive time
  • Seamless billing and payment
  • Detailed reporting
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Small and Medium Business Outsourcing Pros and Cons: the Disadvantages

 

  • Getting to know the system
  • Sorting through all of the available contractor options
  • Lack of feedback scores on some contractors
  • Little or no track records for some contractors
  • Resisting the temptation to simply go for the cheapest contractors (this can be hard)
  • Possibility of miscommunications and misunderstandings leading to less-than-perfect results

 

While the outsourcing pros definitely outweigh the outsourcing cons for small and medium businesses, there are, clearly, some risks to consider that could threaten the success of an outsourcing initiative (no matter how small or big it may be).

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