What is outsourcing? If you had asked this question before the 1990’s decade, the answer would have been simple and explaining that outsourcing is merely distributing the work to other organizations because the parent company cannot perform it diligently. However, after the 1990’s the world economy saw a steep rise with regards to overall progress and companies started developing a knack for outsourcing. Various tasks were outsourced to the most potential and able clients; meanwhile, the parent companies focused on more critical and necessary functions within the organization. This outsourcing boom served a dual purpose, one that it enabled the organizations to perform rapidly and that too with better results and second, it allowed various organizations to set up shop all over the world and work in their niches.
The initial phase of outsourcing was limited to giving out work to in-country organizations that could be contacted quickly, or the managers could also visit these organizations when the need arises. Local outsourcing is an essential concept in the field or outsourcing, be it staff outsourcing or delegating the work for some other production related activities. The local organizations which excelled in their specific niche got a chance to furnish their skills further and help the parent company perform better and earn higher revenues.
There are various benefits of local outsourcing including:
- Accessibility:With the work continuing in the neighborhood office or factory you can easily get insights into the work progress and have the authority to inquire about the amount of work done and also check its quality.
- Understanding: It is evident that the local organization doing your work has a better capability to connect with you and understand the work with precision. Along with this the cultural closeness with the client also helps in enhancing the process and achieves higher performance.
- Negligible time difference:With a local service provider, you can maintain an unlimited communication with each other as there is no time difference.
Some negative aspects of Local outsourcing:
- Limited specialization:With local outsourcing, you have to satisfy your needs with the limited specialization capabilities of the workers. You have to choose from a few numbers of organizations that are providing outsourcing services.
- Higher labor costs:When working in the same region or country for that matter, you may have to pay the same costs as you are paying to your permanent employees. This diminishes the dominant fact of lowering operational costs with outsourcing.