DISADVANTAGES OF OUTSOURCING

Some of the major potential disadvantages to outsourcing include poor quality control, decreased
company loyalty, a lengthy bid process, and a loss of strategic alignment. All of these concerns can
be addressed and minimized, however, by companies who go about the outsourcing process in an
informed and deliberate fashion. Info World 's Maggie Biggs counsels businesses to define "exactly
what business processes and/or functions it makes sense to maintain via a service relationship.
Unless you have a lot of resources to expend, it may make sense to prioritize outsourcing projects
based on the number of benefits you expect to gain from the arrangement." There may also be
inherent advantages of maintaining certain functions internally. For example, company employees
may have a better understanding of the industry, and their vested interests may mean they are
more likely to make decisions in accordance with the company's goals. Indeed, most analysts
discourage companies from outsourcing core functions that directly affect the products or services
that the business offers.
the disadvantages
Information technology has changed the way that the world does business. Correspondence that
once took weeks to get from one organization to another is now delivered instantly with the push of
a button. Advances in telecommunication allow associates from all point of the globe to confer in a
virtual environment, minimizing the need for business travel. Although the benefits of integrating
information technology in business are many, there are also disadvantages to its use.
Implementation Expenses
Every business must consider startup costs when implementing any type of information technology
system. In addition to the cost of hardware and software, some technology vendors require
businesses to purchase user licenses for each employee that will be operating the system.
Businesses must examine the cost of training employees in unfamiliar technology. Although basic
information technology systems may be user friendly, advanced programs still require formal
instruction by an expert consultant.

In addition to the startup expenses, information technology systems are expensive to maintain.
Systems malfunction, and when they do, businesses must engage skilled technicians to troubleshoot
and make the necessary repairs. These expenses present a major disadvantage of information
technology in business, particularly to businesses that are entering the technology era for the first
time.
Job Elimination
Implementing information technology into business operations can save a great deal of time during
the completion of daily tasks. Paperwork is processed immediately, and financial transactions are
automatically calculated. Although businesses may view this expediency as a boon, there are
untoward effects to such levels of automation.

As technology improves, tasks that were formerly performed by human employees are now carried
out by computer systems. For example, automated telephone answering systems have replaced live
receptionists in many organizations. This leads to the elimination of jobs and, in some cases,
alienation of clients. Unemployed specialists and once-loyal employees may have difficulty securing
future employment.
security Breaches
The ability to store information in an electronic database facilitates quicker, more efficient
communication. In the past, an individual would sift through stacks of paper records to retrieve data.
With properly implemented technology, information can be recovered at the touch of a button.

Although information technology systems allow business to be conducted at a faster pace, they are
not without their flaws. Information technology systems are vulnerable to security breaches,
particularly when they are accessible via the Internet. If appropriate measures are not in place,
unauthorized individuals may access confidential data. Information may be altered, permanently
destroyed or used for unsavory purposes.
THE DISADVANTAGES OF TECHONOLOGY IN THE WORKPLACE
A quick glance around any workplace confirms that technology is essential to business. Computer
systems can run assembly lines with a few operators to monitor and troubleshoot if the system goes
offline. Every desk has a computer, equipped with the latest software for data management,
communications, and job task completion. All this technology comes with a price. While using
technology is critical to compete in today's marketplace, there are disadvantages to consider in
choosing the type and scope of use.

Office Distractions
In the next cubicle, John is conducting a job interview via Skype. Sue is walking through the office
talking on her cell phone, and Carlos is into the second hour of his interactive webinar. Add these
distractions to the normal noise of ringing phones, constant emails, and a noisy fax machine, and it's
no wonder that it's sometimes hard to get work done. Technology demands attention. The time
saving advantages are often outweighed by the constant distractions.

Loss of Interpersonal Communication Skills
Cell phones, email, texting and social media have largely replaced face-to-face communications. One
short meeting or conversation can eliminate multiple text messages, phone calls or emails. The
ability to choose the people you interact with, as on Facebook or Twitter, isn't an option in the
workplace, whether dealing with fellow workers or with clients. Interpersonal communications,
critical to building business relationships, are more complicated and require courtesies and listening
skills not necessary in social media. Too much reliance on electronic methods of communication not
only can increase unnecessary traffic, but can decrease vital personal interaction.

Maintenance Costs
Technology is constantly being improved, which requires constant and costly upgrading. Each
upgrade requires employee training, taking time away from production. The loss of productivity
combined with costs of software and implementation can reduce overall profitability. Each upgrade
may also lower morale as employees struggle to learn new applications and to meet new
performance standards. Once a system upgrade is completed, ongoing maintenance fees add to the
overall cost. Since a breakdown of a system can halt the production of an employee, a department,
or an entire plant, the cost of technical support or maintenance contracts are no longer optional.

Increased Security
Despite increased security efforts, there are always hacking risks from the outside and the internal
threat of information theft from employees with security clearances. Many employees in staff
positions need to have access to financial and personal data from customers and clients. Monitoring
employees to protect the information can raise employee privacy issues. Securing passwords and
access to information, and screening employees prior to issuing access are necessary challenges that
add to company costs and jeopardize employee relations.

THE RESOURCE
To gain a deeper understanding of how resources and capabilities can be a source of competitive
advantage, we turn to the resource-based view of the firm to provide a model that systematically
aids in identifying core competencies.9 As the name suggests, this model sees resources as key to
superior firm performance. It defines resources broadly to include all assets that a firm can draw
upon when formulating and implementing strategy. If a resource exhibits certain attributes (which
well discuss next) that resource enables the firm to gain and sustain a competitive advantage.
As Exhibit 4.4 illustrates, resources fall broadly into two categories: tangible and intangible. Tangible
resources have physical attributes and are visible. Examples of tangible resources are capital, land,
buildings, plant, equipment, and supplies. Intangible resources have no physical attributes and thus
are invisible. Examples of intangible resources are a firms culture, its knowledge, brand equity,
reputation, and intellectual property.