What are the advantages and disadvantages of outsourcing?
Living in a global economy, the activity of multinational corporations is becoming increasingly more dependent on outsourcing services. The outsourcing process implies contracting international workforce, from world regions wherein companies do not activate at the moment. Because of its specificity of long-distance working, outsourcing has both advantages and disadvantages for companies that approach this business strategy.
The advantages of outsourcing mostly refer to cost reduction opportunities. Working with people from developing or underdeveloped countries implies benefits both for the outsourced employees and for the company who employs them. The company benefits of considerable lower costs compared to the expenses on salaries for employees in the developed countries. The outsourced employees enjoy the opportunity of earning decent salaries for their economy and of developing a career in an international company. Besides this advantage, the companies can benefit of variable costs for managing the outsourced facilities and they can work with committed people, identifying future talents with low costs.
On the other hand, outsourcing implies working with diverse workforce, which implies cultural challenges that might be difficult to manage from distance. Outsourcing is based on contractual agreements with specific arrangements, financially agreed on. Every change implies new financial agreements, hence the adjustment to change can be difficult in these conditions, hampering the outsourcing company’s progress.
Negotiation of an agreement
As a young professional I was recently tasked to seal deals with diverse clients for selling them outdoor advertising packages. After various attempts, I have finalized my first agreement with a fashion brand that rented several outdoor panels for its rebranding campaign. I consider that the agreement was successful not only because a contract was signed and the client bought the services that I promoted, but also because I managed to gain a client that will bring constant business. The manner in which I conducted the negotiation process and the way in which I communicated with the fashion brand’s representative was professional, based on diplomacy and transparency of communication and it led to a successful agreement.