For the last 5 years I have managed or worked with several teams of people in Manila.
My company outsourced in a low cost nation to save money. For all the rhetoric about quality and availability of Americans to do the work, the business driver was money. We rode that wave for awhile, but because all the big companies are doing it, costs are rising and that driver is waning. But we are committed offshore now, and so we are finding ways to cost cut where we are already invested. My company has decided that they can save more by bringing all those highly trained people on board as employees, removing the overhead we now pay to their employers.

It was a bit of a moment for me when I realized that I wasn't looking forward to the change. The people are the same; the skills are the same. The location and travel will be the same. So I tried to quantify what was different. My first thought was that I just didn't like change, but after a great deal of introspection, I determined that wasn't it.

Now that I am faced with transitioning my team to become employees instead of contractors, I have to make some changes. These changes highlight some of the advantages I had when I had the luxury of outsourcing offshore as well as the benefits that will remain.

1. Outsourcers have their own human resources and management who advertise, screen and interview new applicants. If you chose to talk with anyone, you only interview the best. Or you can let the direct managers make hiring decisions.
2. If a team member doesn't work out, you have many more options when dealing with the situation. You can allow as much or as little time to resolve the issues, but if they don't work out, as the client, you can simply ask for the person to be replaced.
3. Given the flexibility with staffing, you are free to try different approaches using different skill sets. The only cost of failure is the time lost in the effort.
4. There is a certain amount of productivity lost in managing people directly. There can be a huge gain in productivity when you need only communicate with one or two managers.
5. When you work with a team of people very closely, you easily fall into a habit of being sloppy with assignments and projects. Because the team is integrated into the company, you make assumptions that they know what you need done. Most of the time they do. But when it becomes impossible to manage the work, without the written, detailed assignments and plans, frustrations grow, and quality falls. Outsourcing requires precision and planning, and the result is often better.
6. When tasks at hand are projects that have a limited lifetime, outsourcing is perfect because you can let the team go when the contract is over without negative financial or human resource implications.
7. Outsourced teams that move on to other work may be picked up for other business groups inside or your company. They already know some about your corporate culture, the business relationship is already built, and you can leverage their knowledge.
8. Because outsourced teams need to be managed, the people who manage them have a great opportunity to experience the corporate culture and often another world culture as they work together. This mix of cultures can often yield amazing new ideas.
9. When outsourced teams are not in the same city, managers also have the opportunity to travel. No matter how much you love your job and co-workers, it's always nice to have a change of pace.

Many of the benefits of outsourcing are not as obvious as the drawbacks, but benefits outside of cost do exist. Sometimes it just makes sense.

Learn more about this author, Nancy Logan.
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