There is little doubt that outsourcing, when done correctly, can save money and inprove service but there are a number of things you need to be aware of when considering outsourcing:-
1) Product Quality – there are many in-house practices which are not documented which contribute to product quality. If Product manufacture is outsourced these checks and balances will no longer be present and product quality will be adversely affected. It simply isn’t possible to document everything.
2) Hidden Cost – whereas unit cost will be cheaper (otherwise why do it) the overhead cost of managing and monitoring the Outsource supplier may be greater than anticipated, this needs to be closely monitored and managed.
3) Loss of I.P.R – It doesn’t matter what legal documents you sign some of your Intellectual property will be lost to the Outsource supplier and even end up in the hands of your competitors. You need to be aware of this.
4) Project Timescales – Early Projects will suffer unplanned delays, this is an inevitable part of the learning curve.
5) Cultural Differences – these should not be underestimated and, if not clearly understood, will lead to confusion and misunderstanding.
Managing Ousource Projects requires experience and skill. You should seriously consider engaging an Outsourcing expert particularly in the early stages of the Project.
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