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Why
Outsourcing? |
The benefits of outsourcing of course are
variable, dependent upon the nature and situation of the organization.
However, the following is a list of common reasons why outsourcing is
undertaken:
Experts believe that outsourcing is essential for companies to prosper
throughout the '90s and into the 21st century. Outsourcing gives you a
technical and functional edge on the competition -- without capital
investment.
- Faster
development and start up
- A more effective
operating environment at the backend
- Lower costs due
to economies of scale
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concentrate on core functions
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flexibility and ability to define the requisite service more readily
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supplier benefits. For example, better security, continuity, etc.
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service due to focus of the supplier
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internal management disciplines resulting from the exercise itSelf Funded
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upon internal resources
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budget
- Faster setup of
the function or service
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investment required in internal infrastructure
- Greater ability
to control delivery dates (e.g.: via penalty clauses)
- Lack of internal
expertise
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flexibility to meet changing business conditions
- Purchase of
industry best practice
- Improve risk
management
- Acquire
innovative ideas
- Increase
commitment and energy in non core areas
- Improve
credibility and image by associating with superior providers
- Generate cash by
transferring assets to the provider
- Gain market
access and business opportunities through the supplier’s network
- Turn fixed costs
into variable costs
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