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State the advantages of outsourcing.

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The advantages of outsourcing are explained as follows :

1. Efficiency and effectiveness : Many a time tasks are outsourced to the vendors who are specialised in their fields, having deep knowledge, experience, specific equipment and technical expertise. As a result the tasks can be completed faster effectively with greater efficiency and with better quality output.

2. Concentration on core business process : Outsourcing supporting the business processes, facilitates the organisation more time to strengthen their business processes as they need not focus one non-core activities.

3. Cost reduction: Outsourcing reduces its own cost. Outsourcing avoids the need to hire employees in houses. Hence, recruitment and operational costs can be eliminated of minimised.

4. Manpower available at low cost : In every organisation manpower is required to operate machineries, to do routine work, to perform jobs, to administer and manage business affairs. Recruitment and appointment of personnel on permanent basis are most costly. Manpower through outsourcing is available at a lower cost. Outsourcing is beneficial in some portions of business process.

5. Less investment requirement : Due to lack of expert labour, some portions of business process are outsourced by the organisation. Similarly, to reduce or cut the cost, still some portions of business process are outsourced. As a result organisation itself is required to manage only remaining portions of business process. Hence, investment requirements of the organisation is very less.

6. Knowledge sharing : Most of the times tasks are outsourced to the vendors who are specialised and expert (knowledgeable) in their fields. While working together outsourced partners (vendors) share their knowledge, experience, technical expertise, etc. with the employees of the organisation. This is one of the prime advantages of outsourcing.

7. Stimulates entrepreneurship : Outsourcing encourages and stimulates entrepreneurship, employment and expertness in the country from where outsourcing is done.

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