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Outsourcing: Advantages and Disadvantages


With the speedy climb of globalization, the task of global outsourcing today is not "Why outsource and what?" But "How to outsource?" Today's theme is "Let's obtain it right the very first time. " Obstacles to outsourcing companies are own mentalities, local legislation and the robustness of their internal processes. Domains knowledge in many companies has gone totally global.

Sri Lanka is becoming a worldwide IT-BPO destination of choice in a number of key areas of focus domains. Sri Lanka rated among the top 20 global locations in outsourcing / BPO talking to large AT Kearney

The progress of the IT-BPO industry in Colombo offers a distinctive benefits for Small and Medium Companies (SME) to enjoy premium usage of a talent pool of high quality, which is becoming ever more difficult in large proven destinations such as India and China. The environment is also very suitable for the establishment of competence centers area of interest in popular for companies fighting most significant global services.

Sri Lanka can not be at the top of the countries involved with outsourcing of business functions, but it is progressively preferred. Having discovered from India's success in this area is slowly checking to many overseas companies that are beginning operations in this country. Business Process Outsourcing in Sri Lanka has been aided by the fact that the country has opened up a sales outsourcing partnership aimed at assisting it to become reference center for this business.

Business Outsourcing has been an important source of income for China and India for an extended period of time, but the clock is fast becoming the business of Sri Lanka outsourcing. Just what exactly exactly does indeed Sri Lanka quickly get started to increase in this sector? That is attributed to the fact that most sellers are looking for several locations because of their business so they may be embracing Sri Lanka


I plan to execute a constructive criticism on the article ''Sri Lanka - Knowing the probable of Outsourcing" which is compiled by Dr Arul Sivagananathan with this project. This content will be included with definition, advantages and disadvantages, Sri lanka's probable of outsourcing. . . etc. Also there will be a SWOT research to identify Advantages, Weaknesses, Opportunities and Threats of Sri Lanka as an offshore destination.


  1. What is just offshore outsourcing
  2. Types of offshore outsourcing
  3. The Advantages and disadvantages of Outsourcing
  4. All Sight Are Turning to Sri Lankan outsourcing
  5. SWOT Analysis of Sri Lanka as an just offshore destination
  6. Conclusion
  7. References

What is offshore outsourcing?

Outsourcing is the practice of hiring an external firm to execute some business functions in a country besides that in which the goods or services are in reality developed or constructed. It can be contrasted with offshoring, in which the functions are performed in a overseas country with a foreign subsidiary. Competitors say the practice of sending work overseas by countries with higher income reduces their own local employment and local investment. Many careers customer service jobs as well as in the sectors of it (data processing, education and technical support) in countries like america and the uk - have been or are probably affected.

Types of just offshore outsourcing

  • ITO - IT Outsourcing
  • BPO - Business Process Outsourcing
  • Software R&D - offshore software development
  • KPO - Knowledge Process Outsourcing

The Advantages and Disadvantages of Outsourcing

The Advantages of Outsourcing

  • Speed and experience: More often than not the responsibilities to providers that specialize in your field are outsourced. Outsourcing providers also have specific equipment and knowledge, most of the days better than those in the organization of outsourcing. Indeed responsibilities can be completed faster and with better quality production
  • Focus on the key process instead of support: Outsourcing of support functions gives the corporation additional time to bolster its main business process.
  • Risk allocation: one of the main factors that determine the results of a marketing campaign is risk research. The outsourcing of certain the different parts of your business process helps the organization to improve certain obligations outsourced provider. As the outsource specialist is an expert, who plan their mitigation factors better dangers.
  • Reduced functioning costs and contracting: The outsourcing avoids the necessity to recruit people inside your home; therefore, the recruitment and operating costs can be minimized greatly. This is one of the key benefits of outsourcing.

The Drawbacks of Outsourcing

  • The threat of exposure of private data: When a business outsources human resources, payroll and recruitment services, this can be a risk if the coverage of private company information to an authorized.
  • Synchronization of deliverables: If you do not choose the right spouse for outsourcing, a few of the common problem areas include prolonged delivery times, production of sub-standard quality and incorrect categorization of responsibilities. Sometimes it is easier to control these factors within an organization alternatively than an outsourcing partner.
  • Hidden costs: Although outsourcing most of enough time is profitable, sometimes concealed costs involved with signing a contract while putting your signature on a deal through international borders can pose a significant threat.
  • Lack of customer support: A service provider may subcontract basis of the knowledge-needs of multiple organizations simultaneously. In such situations, the retailers may lack a thorough approach to the duties of your organization.

All Eye Are Embracing Sri Lankan outsourcing

Sri Lanka is becoming stable following the battle, however, still has some problems that make it not as competitive as neighboring India. Top included in this is the fact that Sri Lanka lacks a good support infrastructure outsourcing.

The good infrastructure including a good network of streets and modern airports is increased openness to outsourcing business.

Sri Lanka also offers recreational facilities such as beautiful beaches, rich history, among other activities that makes it a leisure middle and a company center.

The methodology therefore leads the money and accounting explanations why everyone wishes outsource of Sri Lanka. There are so many companies that outsource in both of these sectors.

Outsourcing in Sri Lanka is the fact it includes several incentives, some of that happen to be cheap labor with excellent work ethic.

Moreover, enough time lag with the Western world, especially the U. S. , where there's a difference around 12 hours of information and services could be chosen and work throughout the day, so it is cheaper.

Outsourcing in Sri Lanka will be more favorable than the united states produces so many graduates as well as graduates who are unable to get jobs full time. These professionals could be subcontracted to do some work as web design and maintenance careers websites, as well as in relation to the data accessibility. Sellers who've such jobs will find Sri Lanka a destination to be in.

Sri Lanka is also profiting from outsourcing not only at sea, but of the numerous research and development which may have been developed under the outsourcing business model. Like most Asian countries, Sri Lanka offers cheap labor in comparison to developed Western commercial powers and for that reason outsourcing in Sri Lanka includes the best offers.

Besides that, subject to resources and insufficient experience in the outsourcing business. They are the setbacks that the united states needs to dwelling address quickly to reach the same level as their friends and neighbors.

National development programs concentrate on competition to ensure that Sri Lanka becomes a middle of quality and has already established attention in a number of areas. Some of these areas centered on include software services sector that throws its weight in the bank, telecommunications and insurance sector is definitely going to boost BPO companies in Sri Lanka and make them more competitive worldwide. In addition to the IT-BPO was already identified by the government as a key force in the progress of subcontractors.

Sri Lanka going to share most of the unique characteristics that has made India stick out and is preferred especially by the company outsourced offshore. These factors will be the advanced of literacy and specialty in the English language and Western legal model. This attracts many sellers from the western world procedures within Sri Lanka outsourcing easy so conclude settling there.

To better promote outsourcing, Sri Lanka has generated its own trade relationship, which aims Slasscom increasing competitiveness in the BPO business. Furthermore, Sri Lanka has more than seven telecom operators and an international interconnection through three submarine cables. Connects satellite tv, 3G, broadband and lease line are also available in doing so increasing outsourcing of Sri Lanka especially in the IT BPO is one of the very most developed in the affairs of Sri Lanka BPO.

SWOT Analysis of Sri Lanka as an just offshore destination


  • High literacy rate
  • English speaking popuation in colombo
  • Availability of specific talent pool(e. g. most significant pool of CIMA accountants beyond your UK)
  • Investor friendly plans(duty concessions/BOI support)
  • Time area advantage
  • International brands already established
  • low labour cost for highly educated work force


  • Infrastructure(insufficient intelligent buildings developing road & transport systems)
  • Middle & senior management brain drain
  • Lack of English words skills outside Colombo
  • High bandwidth and electricity cost
  • Lack of 24/7 support for the industry such as transport and catering


  • Benefits to other industries
  • Brand Sri Lanka as a distinct segment knowedge hub in IT/BPO
  • End of the civil war
  • Use the large Sri Lankan expat community to entice work


  • USA onshore procedure scaling up at low cost
  • India and philippines curently have a sizable market share
  • China and Brazil rising as strong low cost players with British language skills


There are a lot of disparities in populations through various parts of the world with developed countries generally have less human population, especially under western culture. On the other hand, less developed countries have high human population especially Parts of asia. This has created the essence of offshore outsourcing in a company that operates in a few particular countries hires another founded company to provide it a new labor and services needed country. A number of the key areas where outsourcing is well developed include, finance, administration, payroll administration, customer service and so on.

The main reason a corporation prefer outsourcing is the aspect of cheap labor. Some countries such as India and China have huge populations and craftsmanship of this cheaply. This has led many companies, especially outsourcing of U. S. origin in these countries. This does not work alone, many of these countries have well developed business partnerships that contain worked well to ensure that their countries are competitive and provide preferred subcontractors.

India is the major receiver of outsourcing overseas, with market share of almost 60% of the global level. However, recently there were several new arrivals as Sri Lanka and Malaysia Philippines. As outsourcing can become a major source of income for Sri Lanka we have to learn lessons from India. As and we identify the strengths, weaknesses, opportunities and hazards accurately and follow strategies to get a substantial market share in outsourcing.


http://outsourcemagazine. co. uk

http://en. wikipedia. org

www. e-edge. biz

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