What is Outsourcing

What is Outsourcing

The oxford dictionary defines outsource as We Quote “Obtain (goods or a service) by contract from an outside supplier: there can be no question of outsourcing components from other countries. Contract (work) out: you may choose to outsource this function to another company or do it yourself” Unquote.

Outsourcing basically involves contracting the internal business process to a third party organization. Outsourcing could involve both foreign and inland contracting.

Benefits of Outsourcing

  • The main reason for outsourcing is cost cutting. The cost of labor in another country is cheaper than their own country.
  • Routine process in an organization is outsourced so that the company can concentrate on core activities.
  • Companies outsource in order to avoid higher corporate taxes.
  • Outsourcing helps increase the flexibility of a company in many ways such as: cost, time, technology, assets, resource management, increase in speed of business process, operational excellence, variable cost structure and environmental change.


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