What is some drawbacks of companies that contract out their core / vital functions?
The advantage of outsourcing is that, it allows a business to concentrate on its expertise. Secondly, outsourcing also gives an organization exposure to specialized vendor systems. This assists for a faster turnaround time as well as higher levels of quality.
The disadvantages of outsourcing are that it exposes an organization to potential risk and legal exposure. Additionally, outsourcing calls for the reduction of employees and this is difficult if not managed properly may have a destructive influence on the remaining personnel.