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Outsourcing (Benefits (Cost Reduction (Large savings from lower wage…
Outsourcing
Benefits
Cost Reduction
Large savings from lower wage rates
Improved Focus
Access to Skills
Growth of Revenue
Improve Quality
Conserve Capital
Innovate
Risks
Brand Damage
Allegations of exploitation
Distance
Access during emergencies
Currency
Exchange rates
Can erode benefits
Legal Systems
Intellectual Property rights
Political / Economic Instability
Disruption to supply chain
businesses reluctant to trade in unsafe countries
Quality and reliability of services
Language and Culture
Can slow down the resolution of issues
Why?
No strategic advantage of maintaining functions in house
Do what you do best, outsource the rest
Globalisation
Growth of desitnations
Near-shoring
like outsourcing, but shorter distance
US - mexico and canada
Western Europe - Eastern Europe