The Outsourcing Advantage

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The Outsourcing Advantage

Abstract

Outsourcing has become a well-integrated function in the world of business today. Outsourcing forgoes attempts to perform certain value chain activities internally and instead, farms them out to outside specialists and strategic allies (Gamble & Thompson, pg. 127). An affordable and often more efficient way to meet a goal or perform a task is to have it outsourced. There are many reasons to outsource a task or function. Each reason varies, depending on the nature of the task, the firm’s available resources and the desired outcome. Outsourcing also stimulates the economy, providing a means to support local businesses while simultaneously keeping the organization’s resources aligned internally. There are risks associated with outsourcing as well. One must maintain a localized and unified vision, with the firm’s best interest in mind, before deciding to outsource a job and also for the duration of the contract.

In the world of business today, everyone is looking for the competitive advantage. Organization’s need to streamline their business practices in order to maximize profit margins and reach sustainability. One way to do this is to outsource. Outsourcing is simply the function of taking internal resources, and giving them to outside firms who then make those work operations their sole responsibility (driveyoursuccess.com). More and more companies seem to be outsourcing their services. A recent study by BlueWolf revealed that 35% of companies will outsource more in the next 18 months. This begs the question, why are companies choosing to outsource their jobs? Some companies spend nearly half of their outsourcing budgets on application services including development, hosting and maintenance (King, 2012). Some of the most common services to outsource are payroll, sales & marketing, IT, manufacturing and finance…...

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