What is outsourcing

Purchasing an item or a service from an outside vendor to replace performance of the task with an organisation’s internal operations.
Purchasing a significant percentage of intermediate components from outside suppliers.

Benefits

• Focus on Core Areas: Outsource services allow companies to concentrate or focus on core processes by outsourcing non- core activities.

• Cost Reduction: This is one of the biggest attractions of outsourcing.

• Increase efficiency: An outside provider’s cost structure and economy of scale can give your firm an important competitive advantage and increase efficiency.

• Start new projects quickly: A good outsourcing firm has the resources to start a project right away.

• Level the playing field: Outsourcing can help small firms act “big” by giving them access to the same economies of scale, efficiency, and expertise that large companies enjoy. It can provide non-stop service for client 365 days a year.

• Reduce risk: Every business investment carries a certain amount of risk. Markets, competition, government regulations, financial conditions, and technologies all change very quickly. Outsourcing providers assume and manage this risk for you, and they generally are much better at deciding how to avoid risk in their areas of expertise.