‘Outsourcing’ or ‘in house’, every business professional has been in this dilemma at least once in the lifetime of its business. These define the way of working of a company. Before we begin, it is crucial to understand ‘outsourcing’ and ‘in house’. Outsourcing is a practice of obtaining goods or services from an outside source and in-house is the practice of producing the goods or services within the company.
Both these practices have their own pros and cons, which we have enumerated here.
Now, the most important question arises, which is a better technique between the two? If you have been asking the same question, look no further for the answer. We’ve got you covered. Let’s take a closer look at both of these methods.
What is outsourcing?
Outsourcing is when you assign a non – fundamental function of your company to an organization outside of your company premises. For instance, if you handover the after-sales customer service to an independent call center outside the company, it is known as outsourcing. When your focus on core functions like production is more, the non – core functions like HR management, research, and development, etc, might take subline, which will ultimately harm the goodwill of your organization. In this scenario, outsourcing helps you to handle your subpar work. It is a tried and tested model for the success of your business venture.
Why should I outsource?
There are a variety of reasons why you should outsource services for your company. Countries like India, Bangladesh, Venezuela, etc, have low labour costs. Outsourcing services to companies in countries like these can save a large portion of your costs (used otherwise in hiring full-time staff) and give you access to staff who is skilled and experienced to handle your duties efficiently. Outsourcing releases you with the extra burden of executing literally everything single-handedly. Here are some more benefits on how outsourcing can reduce your overall costs.
Disadvantages of outsourcing
Like every other strategy, outsourcing has its own disadvantages. For instance, sharing of authority with an outsider is one of the major setbacks in outsourcing. Again, if there’s a dip in their efficiency, you will suffer a direct impact. And well, if there’s any carelessness in picking up the right agency, the growth of your organization will go for a toss.
In this age of data protection, when you outsource services that require personal details of your customers, you can put their privacy on probable risks. There is a chance of misuse of the company data provided to the outsourcing company.
However, stats have proved that the endless advantages of outsourcing have taken over the few disadvantages which also can be eliminated if you make the right choice!
What is in-house?
When a company conducts its service and activity with its own assets and employees, within its organization, instead of relying on outside agencies, it is an ‘in house’ practice. For instance, if you hire experienced within your premises for your customer support on a full-time basis, it’s an ‘in-house’ practice. It prevents other companies to exert control over your departments.
Why should I in-house?
When you in-house your activities, you are able to exercise more control over the campaigns and the strategies adopted to reach your desired goals. The company’s employees have a better understanding of the product and the company requirements, resultantly they may be able to employ better techniques to achieve the end goal.
Disadvantages of in-house.
The employees in an in-house system have a limited and similar range of skills and might not be as efficient as the professionally trained resource in an outsourcing agency. When all the activities are done in house, in an attempt to provide high-quality communication services, you might end up devoting all your time in the management of the activities and your focus on the core activities will get hampered.
The final pick!
Some aspects like customer acquisition, distribution, etc. work best when outsourced, whereas others like advertising or marketing have the desired effect when they are done in house. It’s the call of the entrepreneur to take a decision on outsourcing and in-house activities.
However, outsourcing is always preferable when compared because it is cost-efficient, managed by experts and ofcourse releases the extra burden. Business is not business if it doesn’t involve risks. Outsourcing is a risk worth taking because it might just be the key to your success.