Importance of Outsourcing
                     IMPORTANCE OF OUTSOURCING
INTRODUCTION
Outsourcing is a concept people get fired up about. 
Some people love it; others hate it. It seems as though 
nothing divides a room full of business professionals 
faster than the idea of sending some services out of 
house.
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COST EFFECTIVE
Cost-cutting may not be the only reason to outsource, 
but it’s certainly a major factor. Many businesses 
embrace outsourcing as a way to realize cost savings or 
better costcontrol over the outsourced function.
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INCREASED EFFICIENCY
Companies that do everything themselves have much 
higher research, development, sales & marketing, and 
distribution expenses, all of which must be passed on to 
customers. 
Outsourcing the business functions and working with an 
outside provider’s cost structure and economy of scale 
can give your firm an important competitive advantage.
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FOCUS
Outsourcing can help your business to shift its focus 
from peripheral activities towards work that serves the 
customer, and it can help managers set their priorities 
more clearly.
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GROWTH
While growth is usually a good thing, a business can 
experience growing pains. A good outsourcing firm has 
the resources to start a project right away. 
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REDUCED RISKS
Every business and business investment carries a 
certain amount of risk. Markets, competition, financial 
conditions, government regulations and technologies all 
change very quickly.
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ACCESS TO TECHNOLOGY
Some experts tout outsourcing of computer 
programming and other information technology 
functions as a way to gain access to new technology 
and outside expertise. Infrastructure cost is another 
major concern when it comes to in-house services. 
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MAINTAIN OPERATIONAL CONTROL
Operations with rising costs should be considered for 
outsourcing. Departments that might have evolved 
over time into uncontrolled and poorly managed areas 
are good candidates.
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OFFER STAFFING FLEXIBILITY
Outsourcing allows operations or departments that 
have cyclical demands to bring in additional resources 
when they're necessary. The outsourcing company can 
then be released when things slow down again, 
maintaining a company's flexibility.
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PROVIDE CONTINUITY AND RISK 
MANAGEMENT
Periods of high employee turnover can add uncertainty 
and inconsistency to a business. 
Outsourcing provides a level of continuity to the 
company while reducing the risk that a substandard 
level of operation could bring, even over a short period 
of time.
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