PROS AND CONS OF INTERNATIONAL OUTSOURCING 1

PROS AND CONS OF INTERNATIONAL OUTSOURCING

Name

Course
Professor
City and State
Date
 PROS AND CONS OF INTERNATIONAL OUTSOURCING 2

Introduction

Outsourcing is a familiar practice both private and public entities use to acquire goods, and services

from across borders. More organizations consider outsourcing a business strategy that adds value

to business operations. Despite the move, it is interesting to note that outsourcing from

international markets has both pros and cons. With that view, the study will demonstrate that before

engaging in international outsourcing, there is need to consider all decision making factors in terms

of benefits and risks.

Pros

According to Sudawan (2017), international outsourcing enhances expertise and fast delivery. In

most cases, the outsourced services are provided by people who are specialists in a given area.

International outsourcing, therefore, allows vendors who are competitive, and have the required

equipment and technical expertise do a particular task. In many occasions, it is perceived that the

internationally sourced vendors have the capabilities to do better the local ones. This is can aspect

that can be measured in terms of quality, and instant delivery of services.

Further, international outsourcing according to Sudawan (2017), provides the buying organization

with an opportunity to acquire new skills. This is because international outsourcing exposes the

buying organization to the global market. This gives them a chance to learn new ideas in business

and which if implemented can help improve their competitive edge.

Tibor (2006), argues that firms that engage in international sourcing are more likely to benefit from

cost savings. Perhaps, this is due to the fact that no single country has all resources or capabilities

required to do business. Also, there are still variations in terms of cost. While a certain service can

be produced cheaply in a given market, the same can also be very expensive in another. It is

therefore, necessary for the purchasing entities to research and understand various market trends
 PROS AND CONS OF INTERNATIONAL OUTSOURCING 3

and possibly, where the cost of outsourcing can add value to the business in terms of cost

reductions.

In addition, international outsourcing is advantages in the sense that it reduces the risks of failed

business operations. As businesses go about their daily business, their biggest concern is to have

a supply chain system that is reliable (Smith, 2012). However, that is not possible if the business

only depended on mall supply base. Engaging in international outsourcing, then helps develop

alternative supply sources which are important in important in developing smooth supply chain

operations.

Cons

Firstly, not many organizations have the skill, and expertise to execute the process. In a situation

where a business wants to buy globally, then they have to train their staff about global sourcing,

and more especially on issues related to contracting (Smith, 2012). That could be a cost to the

business. It is also that businesses may ended up entering into contracts which they do not very

well understand their legal provisions.

Secondly, international outsourcing involves several players (Zafar, 2013). That is risky because

of the vested interests. That poses a very big challenge in managing lead time. To successfully

achieve the intended goals of international outsourcing, one has to carry out a detailed research,

and develop good working relationship with the suppliers. That is important in working in

collaborative manner in tackling possible risks that can cause delay in the supply chain.

Conclusion

The growth of international outsourcing reveals that the different circumstances determine the

benefits that accrue from that strategy. It is therefore, essential to assess all possible risks, and

benefits before making a final decision whether to buy from the international market or not. That
 PROS AND CONS OF INTERNATIONAL OUTSOURCING 4

entails looking at issues like knowledge, skills, cost, lead time management and general

understanding of the international market trends.

 PROS AND CONS OF INTERNATIONAL OUTSOURCING 5

References

Smith, A. (2012). The Pros and Cons of Outsourcing, UNLV Theses, Dissertations, Professional

Papers, and Capstones. 1478, Fall.

Sudawan, S. (2017). Advantages and disadvantages of outsourcing, The Business and Management

Review, 9(1), PP.157-160.

Tibor, K. (2006). Outsourcing decision support: a survey of benefits, risks, and decision factors,

Supply Chain Management: An International Journal, 11(6), PP. 467-482.

Zafar, I. (2013). Outsourcing: A Review of Trends, Winners & Losers and Future Directions,

International Journal of Business and Social Science, 4(8), PP. 91-107.