Outsourcing refers to the process of delegating an organization’s business process to third parties or an external firm. Benefits of Outsourcing range from labor at low cost to enhanced quality of service and innovation. When outsourcing extends beyond national boundaries or is managed by organizations located in other countries, it is known as offshoring.
The pros and cons of Outsourcing are a contentious topic with numerous articles and essays emerging daily. Here, we believe the pros outweigh the cons and have listed some reasons that are in favor of Outsourcing. Enjoy reading!
Lower Costs & Higher Savings. Both labor and operational costs see a decrease and this is probably the most significant reason that companies choose to outsource.
Focus. Another good reason companies adopt Outsourcing or Offshoring is that enables you to concentrate (time and resources) on your core business functions while other time-consuming but important functions are handled by an external firm.
Leverage Extensive Skills & Knowledge. Outsourcing allows organizations to benefit from an extended knowledgebase and specialist skills that are usually outside the scope and remit of the company. In the case of offshoring, the extent is the world.
Mitigate/Transfer Risks. Outsourcing and Offshoring are a very direct way to transfer or mitigate the impact of risks. The Toyota Motor Company does well by locating some of its manufacturing plants outside Japan where its production bases have suffered hazard from natural disasters.
Expansion Strategy. Some organizations have adopted offshoring as a strategy to gain access to new markets especially outside its original country of location.
Market Strategy. It is common to find companies adopting Outsourcing/Offshoring as a means of penetrating (especially new) markets by moving production and service delivery closer to the end users.
Discover how Sullivan Taylor Company can assist your organization with Global Process Outsourcing. We are headquartered in New York but have staffing specialists in our partner offices around the world to help you engage the best talent for your needs.
