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Why outsourcing is a bad idea Why outsourcing is a bad idea     (Back to list)
Posted by Peter (1) on 2007-Jul-30   22:37

I don't like outsourcing. Don't get me wrong, I have no problem with UK companies working with Indian or Asian companies but the idea of 'detaching' part of your company and handing it over to somebody else thousands of miles away just doesn't seem like a good idea to me. Its a bit like a gazelle outsourcing its liver to the lions because they can manage it so much better.

In no particular order here is why I think outsourcing is on its way out :-


  • Short-term thinking Its not much of a mental leap to realise that as the standard of living in those countries goes up, so will costs. Soon you will have lost the only real advantage of outsourcing - low labour costs.

  • Language + Culture clashes Even though the outsourcing countries might speak perfect English, no one in England does - there are many regional dialects. I am British and even I have problems with some of them.

  • Loyalty An outsourcing company is loyal to its shareholders, not yours. Its also quite likely that your loyal employees are also your loyal customers - unless you have just outsourced their jobs.

  • Humans v Robots Most people prefer to deal with someone who has enough authority to deal with the problem not a script-reading zombie whose sole purpose is to make the process so pointless and traumatic that you give up (and use another company).

  • Critical Feedback If your customers are having problems with your products/services, you hope that any company-damaging info will take the shortest, most reliable route to your board of directors not your competitors board.

  • Security Its a bit hard to feel secure when some of your companies operations can be disabled by someone cutting a cable thousands of miles away.



The only good thing about it is that it helps to relieve poverty in those countries. Who knows, it might even result in a bit less terrorism too.

 
Comment by David (2) on 2007-Aug-03   10:37
Outsourcing per se is not a bad idea. The real problem is that marsupial lions use it as a way of cutting costs AND service. In many instances, what is outsourced is the Customer Service elements of the business. Those that do so, seem to be organisations that pay 'lip service' to customers first but in reality see the customer as an asset to be exploited.

So who cares if you can't connect to the operator in a different culture? At least the organisation can tick the box that they have set procedures and keep regulators off your back. The reality is that exploitative relationships between the organisation and its customers lead to bad outsourcing. In industries where there is 'lock-in', you will find the prevalence of outsourced call centres implemented to shave costs.

Where outsourcing is good is when it is done because the organisation uses a more efficient provider of services. For example, at www.rarelist.co.uk, we outsource the hosting because it is more cost effective for us and then, ultimately, the end customer. However, we still control the quality of service as we have moved the package several times in the past year.

A gun is morally neutral and whether it is used in a good or bad way depends on the user. If I use it to hunt or protect my flocks, it is a good thing. If I use to it rob and kill, it is a bad thing. Like anything else, outsourcing is neither intrinsically good or bad. It is how it is used.

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