Advantages and disadvantages of outsourcing

Advantages and disadvantages of outsourcing
Outsourcing in general is geared toward one main goal of
cost savings. Certainly there are substantial quantity of
other reasons such as reconfiguration of human resource
capital, increase in divisional or organizational
effectiveness and efficiency. However, the ultimate goal is
to increase bottom line by reducing overall costs.
E-Business or ecommerce is no exception. In order to
determine the viability and suitability of outsourcing any
or all business processes a cost saving analysis as well as
return on investment maybe the most suited tools to make
such determination.

The most current trend in the outsourcing appears to be the
marketing aspects of an ecommerce site which may include
Search Engine Optimization (SEO), Link Campaigns, online
organic marketing, offline promotion as well as niche
marketing. Most of these functions occur after the initial
design and implementation with the exception of SEO. Other
common attempts to outsource include article submissions,
data storage, data processing, ad servings, CRM, as well as
many other but similar popular third party services.

The advantage of outsourcing ecommerce projects could
include cost and time savings in initial creation, reducing
cost of maintenance, as well as taking advantage of third
party up to date expertise in design, optimization and
functionality. Though all of these functions can be equally
created internally, the cost efficiency is certainly
questionable. The influencing factors may include talent
acquisition and maintenance, continues educational and
training costs, purchase of hardware and software as well
as their respective maintenance cost, as well as managerial
cost of supervision and evaluation of human resources as
well as tools.

At the first glance, it seems like a no brainier that once
a viable third party is selected, outsourcing of e-business
is a simple choice of economic decision making. However,
there is more to it than it meets the eyes at first. The
most pressing issues is one of strategic nature. The
outsourcing of vital functions such as ecommerce is
certainly a two sided coin. The cost benefits are great yet
the strategic reliance on a third party which essentially
creates dependency as well as lack of internal expertise
may have a greater impact on long term strategic vision
than the cost saving may justify.

Reliance and dependency on a third party eliminates the
negotiation capabilities of the outsourcing entity.
Equally, the lack of internal capabilities and expertise
certainly creates a vacuum in terms of knowledge creation
and maintenance which is equally significant for long term
strategic vision and goals. Nevertheless, even the most
novice business personnel and entities have not only
observed but have actively participated in outsourcing. It
is interesting to see the long term impact of relinquishing
total or partial control over vital functions by means of
outsourcing.

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