Pros and Cons of Outsourcing Research Paper Example | Topics and Well Written Essays - 1000 words

Pros and Cons of Outsourcing - Research Paper Exampleoose to outsource to avoid the painful sensation of manufacturing in-house and reduce the cost of business while the risks involved in outsourcing are mainly lack of coordination, and lingual barriers. Right management is the secret of a successful business which uses outsourcing.Outsourcing particularly proves beneficial for small companies. matchless of the success stories for such a case has been the outsourcing of Finance and Accounting (F&A) by Rhapsody the music-subscription service. Originally the company was operation as a joint venture, alone when the parent companies separated, the finance president Michael McGinn immediately needed a finance team, so he opted for outsourcing. McGinn hired the services of an Indian company who did all for the company ranging from do payrolls to account reconciliations. This benefited the Rhapsody in numerous ways additional resources were produced within six months only, scaling bac k was achieved without penalties, and the quintet employees in the Indian company cost the Rhapsody as much as two US-based employees would get. Technology has do it very convenient for small companies to outsource the F&A work at cheap rate. As a result of the increased competition in the market, outsourcers have started to render their services at cheaper rates. at that place has been a six to eight per cent decline in the price of F&A outsourcing amongst 2009 and 2011. Over a period of six years starting from 2004, the outsourcing contract has declined in value from $30 million to $18 million not only because of increased competitiveness and falling price points, but also to the increased number of engagements being signed with organizations in the $750 million to $3 billion revenue enhancement category (Stuart). According to Ben Towbridge, the CEO of Alsbridge, an offshore finance employee costs a company anywhere from $18,000 to $28,000 annually, whereas a US finance worke r charges the company up to $70,000 including benefits (2011).The core idea of starting