Question

State the advantages of outsourcing.

Answer 1

Outsourcing refers to the long-term contracting out of non-core activities of an organization to third party specialists to benefit from their expertise and experience.

Advantages of outsourcing are:

1. Focusing attention: When the non-core activities are outsourced, we get more time to focus on the core activities.

2. Quest for excellence: When an organization wants to excel in an activity it may outsource it to the third party so that it can be performed by the experts.

3. Cost reduction: When the activities are outsourced the overhead costs of such activities reduces

4. Growth of alliance: When two or more parties work together, they build a good alliance among them.