Aside from Cost-saving

Filed in archive Basics on February 28, 2007

I always have people questioning me on why most companies outsource and if money is only the driving factor in outsourcing. Let me tell you that there are a lot of reasons why companies outsource but the reason why money is the main reason is because it is.

Though cost-saving is identified as a reason for outsourcing, it is not the only driving force behind this business strategy. Here are some additional reasons why most companies outsource:

-variable capacity
-wanting to focus more on core competencies
-lack of in-house resources
-providing a job done efficiently or effectively
-an increase in flexibility to meet changing business and commercial conditions
-tighter control of budget because of predictable costs
-lower ongoing investment in internal infrastructure
-ability to access innovation and thought leadership
-a possible cash influx through transfer of assets

I believe that the combination of these reasons mentioned are the driving force behind a company's decision to outsource.