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Outsourcing Advantages and Disadvantages
Let’s discuss the main Outsourcing Advantages and Disadvantages in brief. Many businesses
choose an outsourcing partner or service provider on instincts, without initially matching their
needs with the partner's capabilities. The two most important Outsourcing Advantages and
Disadvantages factors in a successful outsourcing relationship are trust and security - without
these the relationship is destined for failure. It is therefore important that you take the time and
effort required to find the perfect partner.
Firstly, acquire a list of potential partners before judging the potential Outsourcing Advantages
and Disadvantages. You should then find out if their service can cater for your needs. Speak to
an employee of the service provider, as their service may extend from what it initially suggests
on their web site or information supplements - there could also be hidden terms and conditions
that may affect your decision and ultimately Outsourcing Advantages and Disadvantages. Find
out who their current/past clients (if at all) are so that you can obtain references on their service
quality. Finally - and arguably most importantly - ensure that the service provider has long-term
financial stability. Obtain a company report or bank reference to solidify your perception.
With this is in mind let’s prepare a small listing of the general Outsourcing Advantages and
Disadvantages:
Advantages of Outsourcing:
Allows a business to focus on core activities
Streamlines a business' operations
Gives you access to professional capabilities
Shares the risk
Piece of mind that the process is in good hands (reliability)
Do not have to worry about continually introducing new technologies
Improves service quality
Frees up human resources
Frees up cash flow
Increases the control of your business
Makes the business more flexible to change (i.e. demand)
Disadvantages of Outsourcing:
The fear of the service provider ceasing to trade (bankruptcy, etc)
You may lose control of the process
Creates potential redundancies
Other companies may also be using the service provider. Therefore in some cases, the best
interests of the service provider may be diluted with other users
You may lose focus of the customer and concentrate on the product (the outsourced process)
The loss of talent generated internally
Employees may react badly to outsourcing and consequently their quality of work may suffer
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