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Outsourcing: advantages and disadvantages

How the consequences of outsourcing can be correctly assessed and exploited. Tips for successful companies.

Outsourcing software development- when is it necessary and what does it bring?

Competitive advantage, normalcy or harm to the economy?

Whether as an entrepreneur or a private person: Most people already use outsourcing. Nobody throws all his letters into the mailbox of the recipients themselves and no one has his money exclusively in the savings stocking.

So the question is not whether a company should outsource, but what areas it should outsource, for what time horizon and for which partners this makes sense.

Short-term benefits and long-term disadvantages?

The most frequently cited reason for outsourcing is the short to medium term cost savings. This is followed by the improvement of service quality by partners with special know-how and more resources. With the right partner, you can combine these two goals and realize projects that could not be tackled single-handedly. Not every company can afford its own IT department or a call center.

Every outsourcing involves a certain amount of dependency. This has consequences in the short term if one goes depending on a single provider. In the long term, the damage can be great if offspring are missing locally because companies have long employed only employees abroad.

Outsourcing that really relieves you

When it comes to the core competencies of a company, companies should thoroughly consider what consequences outsourcing can have. The easiest way is not always the best. One should also consider the social responsibility that an entrepreneur must undertake. Those who do not train themselves or offer future prospects contribute to the shortage of skilled workers. Outsourcing opportunities that leave more latitude for the actual tasks should be taken if possible. In addition to delivery services, factoring is an obvious example. When companies hand over invoices to a partner like Svea, they no longer have to worry about controlling the payment or dunning. You have the opportunity to sell more invoices at any time. This gives you full control.

Contract terms for outsourcing

An important factor in outsourcing is the contract duration. If you commit to an outsourcing partner for 3-5 years, you lose some flexibility. While there are outsourcing models closer to a partnership, there are other risks involved. In both cases, the question remains whether the contract provides you with sufficient control options to remain able to act in the event of changes.

In general, outsourcing partners primarily offer standardized products. Any adjustment to customer requirements will incur costs and will be avoided as much as possible. Svea reacts to this by having the factoring partner coordinate the contact with the end customers to the wishes of the suppliers. In the case of open factoring, end customers are provided with clear information about the assignment of bills.


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