For many companies, outsourcing is viewed as a way to lower costs, boost efficiency, and free up time and resources to focus on core business activities. To accomplish this, an increasing number of companies are hiring business process outsourcing (BPO) firms to handle front- and back-office business functions like human resources, finance, accounting, customer care, and information technology.
Despite the boon to foreign economies and those who tout the benefits of BPOs and outsourcing in general, critics point out that the practice does not always result in cost savings and increased efficiency. In fact, a number of case studies in recent years highlight that outsourcing can lead to significant cost overruns. A 2012 survey of 250 information technology professionals that was conducted by Los Angeles-based Lieberman Software revealed that outsourcing sometimes results in higher-than-anticipated project costs. According to 42 percent of those polled, the cost of outsourcing agreements was higher than originally planned. And while many believe that outsourcing can help companies address a number of business challenges, others point out that outsourcing—when it goes awry—can create problems that are very costly and time-consuming to fix. (Opposing Viewpoints)