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What are the risks/disadvantages of Outsourcing?
Home » Small Business » Small Business Outsourcing » What are the risks/disadvantages of Outsourcing?Although it doesn’t necessarily apply within greenfield outsourcing, traditional outsourcing may lead some business owners to feel as though they’ve lost control of part of their business. For example, if your business has operated its own customer service process for several years, and you then decide to outsource that process, you may find it disconcerting to realize that someone else represents your business in that department. Using customer service as an example also illustrates another potential drawback, which involves a weakening of the bonds between your business and your clients. In that example, though the service provider will operate under your guidelines, it is the service provider that will interact with your customers rather than you or your employees. Some other risks may include:
Employee dissatisfaction: In traditional outsourcing, where employees in the affected process may find themselves terminated, slotted into new jobs, or transferred to a service provider, outsourcing may create an unhappy and less productive employee base.
Overdependence: Especially in situations where your service provider is outstanding in their area, your business may cease to even consider the possibility that it may eventually need to handle the outsourced process in-house in the future. Such dependence could prove troublesome if your service provider ceases business.
Service provider loyalty: Unless your service provider has just opened its doors, you should realize that it’s highly unlikely that your business is the only client of that service provider. If your service provider also works for other businesses in your sales or product market, there are situations in which it might be difficult for that service provider to look solely toward the best interests of your company.
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- What are the risks/disadvantages of Outsourcing?
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