Question

Describe the benefits of Outsourcing.

Answer 1

1. Focusing on Core Activities: Companies can focus on their core competence, a few areas, where the company has a distinct capability. The rest of the activities (non – core) can be outsourced to outside agencies.

2. To Fillip Economic Development: Outsourcing stimulates entrepreneurship, encourages employment opportunities, expands exports, enables tremendous growth of the economy.

3. Encourages Employment Opportunities: Companies that are outsourcing their noncore activities provide chances for other small business units to take up the activities. This paves way for more job opportunities and new employment avenues.

4. Reduction in Investment: Companies through outsourcing avails the services of outsiders which in turn reduces the investment requirements. The amount so available can be utilized productively and this increases the profits.

5. Quest for Excellence: Outsourcing enables the firms to pursue excellence in two ways namely excelling themselves in the activities they do and excel outsiders by extending their capabilities through contracting out.