The Good and Bad of Domestic Outsourcing

Trends in maturing or new technologies have transformed the business landscape over the past decade. Whether it’s Cloud computing, Software as a Service (SaaS) applications, mobile applications, social media networking or digital media technologies, companies are beginning to demand greater choices, and faster product and service delivery. Technology and business process infrastructure is becoming easier to acquire and manage, lowering barriers to entry and increasing competition. The problem being that with the increase in demand for these new technologies, IT funding for such products have decreased due to the economy, companies becoming lean, or just not having the necessary tools, resources, or time to implement these new or even older technologies. Domestic outsourcing can be used as a tool to solve these problems with the expected outcome that it will have only a small impact on the business to manage. Companies should weigh out the benefits and disadvantages of using domestic outsourcing as a solution. Benefits of Outsourcing When determining whether or not you want to outsource domestically, there are many things to consider. “Benefits can potentially be created for a business in terms of both cost savings and expertise.” (Outsourcing benefits: [1 Edition], 2006) Some of the benefits as listed in the table below. (Jurison, 1995)

One of the main reasons any organization will outsource is cost. Many businesses today are faced with the problems of small IT departments and limited budgets even though the need for IT resources increases. IT Managers must make the tough decisions on how to meet these needs with the resources they have. With contracting out certain areas where the organization may not have the time or resources to focus its efforts on, the business is now able to dedicate its existing resources to the activities in which it already is skilled. Another aspect of expertise outsourcing is that the business has now saved on the time spent hiring people for these specialized positions or skills, training existing resources to learn these skills, or both.

Another benefit is that outsourced workers are often temporary. Some of these specialized skills or positions are only needed for a short period of time as well. Businesses can utilize the knowledge base of trained specialists as needed until the work is completed. "Our primary goal in outsourcing IT staff has typically been [getting people to] handle certain tasks that require an unusually quick response or [gaining] extra resources for short periods of time," says Haldis Toppel, information systems manager for Los Angeles. (Sawyer, 1999) With low budgets for IT projects it is hard to keep hiring and releasing employees, especially in organizations who try to be lean. With outsourcing it also can fill the “immediate needs but also eliminates much of the difficulty of employee-employer compatibility, which can often be difficult to assess until an employee has worked several months.” (Sawyer, 1999)

If a company has an immediate need for help with PC deployment, they can go to a contracting agency and hire a contractor to complete the task. From the vendor you immediately know that the contractor suggested has met the skill requirements ahead of time. This eliminates initial time spent sifting through applicants for a full time hire. They now only have to go through a few options from the outsource vendor. If a company decides to go with a service type of outsourcing solution, the company will rely on the outsourcing vendor to find a suitable person to complete the project.

For temporary contractors, companies can also be given the option to hire the contractor as a permanent employee if they find that they like the contractor and affirmed that can use the contractor as a full time hire. “Many organizations also offer lease-to-hire programs that make it possible to permanently retain