Why do Organizations Outsource Their Processes?
Reduction of Operating cost. 2) Company do not have the expertise. 3) Focus on the core business. 4) Tax benefits. 5) Readiness to meet high/low demands"
Reasons to outsource business processes:
1) One of the major reason can be the reduction of Operating cost
2) The company do not have the expertise & do not want to develop/invest in expertise for the same process. Maintain Quality, Avoid investment in Training
3) Focus on the core business, freeing resources
4) Tax benefits So can be a part of cost reduction
5) Readiness to meet high/low demands as per the Dynamic Market scenario
6 THOUGHTS ON “WHY DO ORGANIZATIONS OUTSOURCE THEIR PROCESSES?”
It could be because of:
1. Lack of Competence/Skills
2. The cost involved in the entire set up on premise. It also includes the cost of setting up the Business Continuity plan
3. Risk Transfer
Outsourcing is, of course, the strategic decision of any company and there can be multiple reasons/aspects behind this.
1) One of the major reason can be the reduction of Operating cost.
2) The company do not have the expertise & do not want to develop/invest in expertise for the same process. Maintain Quality, Avoid investment in Training.
3) Focus on the core business, freeing resources.
4) Tax benefits So can be a part of cost reduction.
5) Readiness to meet high/low demands as per the Dynamic Market scenario.
Though it's not the complete list (just a few important ones), there can be few more reasons specific to particular industry/domain like location advantage, Cultural challenges, Vertical or downward integration (ultimately linked to cost again) of any process/product.
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