BENEFITS

Cost Savings

The lowering of the overall cost of the service to the business. This will involve reducing the scope, defining quality levels, re-pricing, re-negotiation, cost re-structuring. Access to lower cost economies through off shoring called "labor arbitrage" generated by the wage gap between industrialized and developing nations.

Commodification

The trend of standardizing business processes, IT Services and application services enabling businesses to intelligently buy at the right price. Allows a wide range of businesses access to services previously only available to large corporations.

Time Zone

A sequential task can be done during normal day shift in different time zones - to make it seamlessly available 24x7. Same/similar can be done on a longer term between earth's hemispheres of summer/winter.

Catalyst for Change

An organization can use an outsourcing agreement as a catalyst for major step change that can not be achieved alone. The outsourcer becomes a Change agent in the process.

Cost Restructuring

is a measure that compares fixed costs to variable costs. Outsourcing changes the balance of this ratio by offering a move from fixed to variable cost and also by making variable costs more predictable.

Reduce Time to Market

The acceleration of the development or production of a product through the additional capability brought by the supplier.

Operational Expertise

Access to operational best practice that would be too difficult or time consuming to develop in-house.

Improve Quality

Achieve a step change in quality through contracting out the service to professionally trained staff.

Contract

Services will be provided to a legally binding contract with financial penalties and legal redress. This is not the case with internal services.

Risk Management

An approach to risk management for some types of risks is to partner with an outsourcer who is better able to provide the mitigation.

Knowledge

Access to intellectual property and wider experience and knowledge.

Staffing Issues

Access to a larger talent pool and a sustainable source of skills.