Question

Quite a few organisations outsource services instead of hiring people as permanent staff. State any two advantages of this practice to the outsourcer.

Answer 1

Advantages of outsourcing are as follows:

1. Cost Savings: Outsourcing can help organisations save money on labour and overhead expenditures, especially in low-wage countries. Outsourcing eliminates expenditures in infrastructure, technology, and personnel benefits, leading to significant cost savings for the outsourcer.
2. Focus on Core Activities: Outsourcing non-essential functions allows organisations to focus on core business activities that contribute to their strategic objectives and competitive advantage. Delegating regular activities to external suppliers helps firms streamline operations, boost productivity, and better deploy internal resources.