The Reasons Behind Outsourcing

  • September 19, 2011
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With the ongrowth of information technology emerges a very huge business trend which is reportedly earning about a trillion dollars. And it is called OUTSOURCING.

The concept started to gain popularity back in the mid 1990’s, as it was incorporated by business groups as a very essential strategy in planning their operations. Outsourcing mainly involves transferring or delegating of some of its non-core operations to an external third party service provider which specializes in those operations.

The main reasons why business groups outsource? The very tactical reason of it all is to reduce/cut costs, which eventually enables companies to concentrate on core competencies, unrestraining some other activities. When companies outsource work they transfer access to its service provider, thus, saving money.

As mentioned earlier, companies can now focus more on other activities, particularly voluminous business issues. Outsourcing somewhat resurfaces the company’s management over its organization, helping the company to meet the needs of its customers, which results to the company’s accelerated growth.

These third service provider companies also can now share the same world class capabilities.

Another thing would also be sharing risks between the provider and the client. Companies who outsource work tend to be more flexible and more productive, thus it makes work more easier. It draws the company to be able to cope with the remodeling opportunties. We all know that the environment surrounding outsourcing changes through time. And these changes make things far more difficult. And they all owe it to outsourcing.

Every company has limited resources it can avail. What outsourcing does is that it expands these resources (in the most important areas of the business) and then the client earns more.

Capital funds are also enabled by outsourcing for inside operations. And this improves the client’s capacity in financing.

We should also consider those companies expanding operations to other countries. With outsourcing they get access
to the outside world.

This new market trend has indeed taken the world by storm. A great way to find money in the bank.

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