Some hidden costs of outsourcing

You may think that business process outsourcing would definitely help

Some hidden costs of outsourcing

Posted on: June 1, 2012
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You may think that business process outsourcing would definitely help your company in saving some money. This is actually one of the biggest reasons why plenty of organizations, from small businesses to the major companies worldwide, have decided to implement them into their offices. For the most part, this is true. Outsourcing does provide companies with a method to provide services without worrying about rising costs. However, there is also another side to this. Some hidden costs are associated with outsourcing. Some hidden costs associated with outsourcing would include: The IT infrastructure cost: One of the hidden costs of outsourcing would include expenses incurred because of improving your IT infrastructure. You should realize that for outsourcing to work (especially offshore outsourcing), you would need to have a good IT infrastructure in place. While you may be looking only at how much you are paying to your outsourcing partner, you may not realize that you are also spending some money on improving and maintain your infrastructure (broadband costs, computers, network administrators, etc.). The strength of your currency: Another thing that you should also understand for offshore outsourcing is that you are tied to a contract with your partner, even with the fluctuations in your currency's value. If the economy is good, you would be able to truly save up on some money while offshore outsourcing. On the other hand, a poor economy would reduce your savings, and if things would really go bad, you may actually lose some money. Of course, you should realize that even with these hidden costs, outsourcing may still be able to save your company money. It would just affect it in a way that you would not be actually saving as much as you initially planned.

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