What can be achieved by outsourcing, what should/could be outsourced? What are your reasons for outsourcing?
Lower costs due to economies of scale
Ability to concentrate on core functions
Greater flexibility and ability to define the requisite service more readily
Specific supplier benefits, better security, continuity, etc.
Higher quality service due to focus of the supplier
Improved internal management disciplines from exercise itself
Less dependency upon internal resources
Control of budget
Faster setup of the function or service
Lower ongoing investment required in internal infrastructure
Ability to concentrate on core functions
Greater flexibility and ability to define the requisite service more readily
Specific supplier benefits, better security, continuity, etc.
Higher quality service due to focus of the supplier
Improved internal management disciplines from exercise itself
Less dependency upon internal resources
Control of budget
Faster setup of the function or service
Lower ongoing investment required in internal infrastructure
Greater ability to control delivery dates (eg: via penalty clauses)
Lack of internal expertise
Increase flexibility to meet changing business conditions
Purchase of industry best practice
Improve risk management
Acquire innovative ideas
Increase commitment and energy in non core areas
Improve credibility and image by associating with superior providers
Generate cash by transferring assets to the provider
Gain market access and opportunities through the supplier’s network
Turn fixed costs into variable costs
Lack of internal expertise
Increase flexibility to meet changing business conditions
Purchase of industry best practice
Improve risk management
Acquire innovative ideas
Increase commitment and energy in non core areas
Improve credibility and image by associating with superior providers
Generate cash by transferring assets to the provider
Gain market access and opportunities through the supplier’s network
Turn fixed costs into variable costs
Despite the size of this list, every scenario is different. There may well be equally compelling arguments against any sort of outsourcing arrangement. It is therefore important that ALL the issues are considered before embarking upon the outsourcing course. This assessment should take into account all factors that you can consider.
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