Why Outsourcing?

  • September 3, 2011
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Outsourcing, or in other terms, out-tasking, include delegating a probable amount of management control to the corresponding supplier. Buying from another entity is not considered a form of outsourcing or out-tasking, but rather a vendor relationship. Of course there are a lot of different reasons why companies resort to outsourcing some of their operations nowadays.

The term “outsourcing” became more popular probably due to the increasing growth in the number of highly developed technological companies based in the early 1990s that were said to be often not that large enough to be able to easily carry on large customer service departments of their own. In some cases these companies employed technical writers to break down the handling instructions of their products, arrange the key points of information and contracted with temporary employment agencies to find, train and then hire generally low-skilled workers to answer their telephone technical support and customer service calls.

For some, outsourcing cuts or controls costs. This is because it is said to be the most important strategic reason for outsourcing work. The access to a third party service provider’s much lower costs is one of the driving benefits of outsourcing work.

A survey once said that companies observed a 40% reduction of costs through outsourcing.

It is also said that a number of firms resort to outsourcing due to the fact that it increases the quality of the product.

Some economists also claim that outsourcing somewhat innovates technology, like machines on a car’s assembly line. While outsourcing enables lower costs, the corporation benefits.

To meet the customer’s needs, outsourcing firms must provide capacious excellent resources. Pairing up with a corporation with excellent capabilities as well enables the firm access to new technology, tools and techniques that it may not obtain; more methodologies; processes and documentation;and competing benefits through extensive work.

http://www.intozone.com/why_whyout.htm
http://en.wikipedia.org/wiki/Outsourcings

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