OUTSOURCING...is it really cost savings...does it really makes companies realize their inefficiencies?

Answer 1

Since Big Blue changed the way companies view their employees, outsourcing has been an effective way to decrease the cost of doing business. The "bottom-liners" love it. It used to be that payroll, insurance costs, etc were just considered a necessary cost of being in business. After IBM invented the term "downsizing", it seems that companies changed their view of labor costs to be strictly a cost center and lost sight of the effects changes have personally on employees.

Direct answers...Yes. No.

They have lost sight of ethics in outsourcing. Turning a blind eye to the effect on your employees does not make it any lees real.

Answer 2

This is a two part question and my answers are :-
(1) Is it really cost saving

It depends on how you out-source and what to out-source. Cost cut in outsourcing may be cancelled out by increased cost in co-
ordination / supervision / management. The best part of work to be out-sourced are those :"back -office" work which the corporation is not excel but those work is still essential to the corporation. A good example is to out-source the building security or cleaning work.

(2) Does it really makes companies realise their inefficiencies.

The answer is that is your company is a "learning organisation", you will probably learn from what you are not excelled at by out-sourcing.

The concept in outsourcing is really simple - " when you could not do it, let other people to do it". When a company is small, everything is outsourcing, so why when a company is large, it is so painful to cut back some work, save some resources, and concentrate in what your company is good at?