Voice App: Advantages and Disadvantages of Outsourcing Tech Support

This report analyzes the potential outsourcing of technical support services for Voice App, a mid-sized software company. The analysis explores the advantages, such as gaining expertise, access to better technology, cost-effectiveness, improved customer service, and scalability. It also addresses the disadvantages, including the risk of hiring the wrong provider, reduced control, and potential lack of experience. The report emphasizes the importance of a thorough cost-benefit analysis, considering both short-term gains and long-term consequences before making a decision. It also provides insights into the current staffing situation, the need for 24/7 support, and the factors that influence the outsourcing decision. The conclusion stresses the need for Voice App to carefully evaluate all aspects before proceeding with outsourcing.

OUTSOURCING

INTRODUCTION
Outsourcing is when an activity or an operation that can be performed by the organization as
a part of its daily operations is being sub-contracted to another organization for a good period
of time. In other words, it means purchasing the services or raw materials, as per the business,
from outside suppliers and not producing it or performing it as an in-house operation.
Outsourcing decisions aren't the kind of decisions to be taken just by a thought. These
decisions are undertaken by the management after an in-depth research of costs and savings
and the benefits or difficulties that the company would enjoy or face respectively on account
of outsourcing. Outsourcing is currently popular in both profit seeking and not profit oriented
organizations. Outsourcing means incurring additional external costs but on the other hand,
saves certain internal costs. So basically, outsourcing decisions depends on the comparison of
internal and external costs. Both marginal costs and revenue are to be considered before
taking decision of outsourcing (Heisinger, 2010).
As per the current case, Voice App is a mid size software company and is thinking of
outsourcing the technical support services due to rising costs. Technical support is providing
your clients 24*7 support that means either to spend a lot of money on staffing a number of
employees or hiring the support from outside suppliers. Currently, Voice App is having a
staffing team of 30 full time and 15 part time employees. However, to make such a decision,
a research work is to be considered as there are a lot more factors than just the cost. So in
order to consider outsourcing, here goes a list of advantages and disadvantages of outsourcing
technical support services in an descending order of importance (Jiambalvo, n.d.).
ADVANTAGES :
 Gaining Incredible Expertise : If the background of the company is not actually
connected with providing technical support, outsourcing the support would lead to
an addition of incredible advantage. Organizations that are indulged in providing
technical support are experts in their fields and would be obviously providing the
best possible support to its clients. Experts can not only be hired to handle
customer's needs but can also be hired to analyze our own backend needs such as
intense monitoring of operations (Pandikumar, 2007).
 Better Technology : Companies indulging in technical support services will be
providing better technology than the in-house staffs will provide. The huge
advantage would be that the company will always have a supporting strong team
that would possess the best possible technology. There would be faster responses
in a fraction of time with the right kind of technical support team.
 Very Cost Effective : If we actually analyze the cost structure, hiring a staff team
that works around the clock everyday of the week is kind off expensive
(Samuelson & Nordhaus, 2010). Not only a large number of experts and other
members are to be hired, but the cost of overhead for the space and equipments to
execute the job will also be incurred. When the services are being outsourced, so
many payments are not to be incurred. There would be no requirement of extra
office space & equipment, huge salaries every year but instead only a support

package is to be chosen as per the specific needs and payment is to be made only
for that. Outsourcing can save hundreds of thousands of dollars every year. For
some, there is a saving of up to 80% on account of outsourcing.
 Better Customer Services & Easy to Scale the business : Outsourcing will provide
excellent customer service as their sole aim is to make customers happy and taken
care of (Warren, Reeve & Duchac, n.d.). Also, with outsourcing, a business is
allowed to grow as quickly or as slowly as it wants.
DISADVANTAGES :
 Probabilities of hiring the wrong technical support team : A company may not be able
to hire the most appropriate technical service provider and may be deceived. For
example, if an overseas company is hired, issues may occur like language barriers or
less adequate services.
 Less Control : Since through outsourcing, the main company actually depends on the
service provider, there is a probability of not controlling the service related tasks on a
daily basis as it is obvious of not overseeing the support services on a daily basis
otherwise what is the point of entrusting this work to an outsider.
 Less Experience : Some service providers may take up the job even if they have less
experience in that and would advertise about their services and accept the projects just
to get jobs and earn monies (Weygandt, Kieso & Kimmel, 2011). This is in some way
blinding the main company so as to fulfill its own needs.

CONCLUSION
As per studies, Outsourcing is a long term loss for short term gains. Outsourcing results in
missing of a chance of not having one own's workforce that would obviously be under the
control of the company. They may achieve their present targets, but from a long term
perspective, an optimal cost effective arrangement may not be achieved in future. Therefore,
Voice App should consider both short term and long term consequences and should go for in
depth analysis of costs and benefits and then only opt for outsourcing.

References:
Heisinger, K. (2010). Essentials of managerial accounting. Australia: South-
Western Cengage Learning.
Jiambalvo, J. Managerial Accounting.
Pandikumar, M. (2007). Management accounting. New Delhi, India: Excel Books.
Samuelson, P., & Nordhaus, W. (2010). Economics. New Delhi: Tata McGraw
Hill.
Warren, C., Reeve, J., & Duchac, J. Financial and managerial accounting.
Weygandt, J., Kieso, D., & Kimmel, P. (2011). Managerial accounting. Hoboken,
N.J.: John Wiley & Sons.