Outsourcing is the process of delegating a company's business process to third parties or external agencies, leveraging benefits ranging from low cost labor, improved quality to product and service innovation. When outsourcing transgresses national boundaries and is managed by companies located in other countries, outsourcing takes the form of offshoring.
A hotly debated topic with pros and cons, both outsourcing as well as offshoring have a direct impact on a company's top and bottom line and have become key components of defining how successful enterprises are run. Given below, as reflected by companies, are the top 10 reasons to outsource:
1.Lower operational and labor costs are among the primary reasons why companies choose to outsource. When properly executed it has a defining impact on a company's revenue recognition and can deliver significant savings
2.Companies
also choose to outsource or offshore so that they may continue focusing on
their core business processes while delegating mundane time consuming processes
to external agencies
3.Outsourcing and offshoring also enable companies to tap in to and leverage a global knowledge base, having access to world class capabilities
4.Freeing up internal resources that could be put in to effective use for other purposes is also one of the primary benefits realized when companies outsource or offshore
5.Many times stranded with internal resource crunches, many world class enterprises outsource to gain access to resources not available internally
6.Outsourcing,
many a time is undertaken to save costs and provide a buffer capital fund to
companies that could be leveraged in a manner that best profits the company
7.By
delegating responsibilities to external agencies companies can wash their hands
off functions that are difficult to manage and control while still realizing
their benefits
8.Outsourcing
and especially offshoring helps companies mitigate risk and is also among the
primary reasons embarked upon
9.Outsourcing
also enables companies to realize the benefits of re-engineering
10.Some
companies also outsource to help them expand and gain access to new market
areas, by taking the point of production or service delivery closer to their
end users
