Have you ever been wondering why concerns invest in outsourcing?

Posted on 18/03/2019 5:52am

I am sure that you already are familiar with term “outsourcing”. This term starts to be more and more popular. Usually people know intuitively what this term means, but can’t explain it if somebody asks. Plenty of people, which I known, don’t also understand why enterprises decide to use outsourcing.

Author: Maciek Lulko
Source: http://www.flickr.com

I have often been asked the following thing – why do firms pay for any external enterprise to do things that they could do by themselves? I have to admit that this logic might seem to have sense – if somebody else is able to earn money on doing tasks for us, why wouldn’t our company conduct this by themselves?

I am going to do my best to present that on the following example. Assume for a while that you own a enterprise that invents and creates new mobile phones. You are wondering about outsourcing managed services- see more details. Thus, you are looking for a successful company which operates in the field of mobile app development- check the facts. What can your company gain if you decide to outsource?

To start with, you can reduce costs. Developing new complex producst will require hiring many professionals that are very expensive as employees. This would be a lot more profitable to have to outsource an external company which is specialised in this field and already has experienced staff. Because of that, this is highly likely to be low-priced to outsource an external firm, than to have proffesionals within the structure of our enterprise. This is one of necessary thing that makes businesses use outsourcing. The central aim is cost reduction. Certainly, not the only one.

However, firms may cut down labor costs also by outsourcing services from the external enterprise that is located abroad. Obviously, it has to be country that has very well qualified people but lower cost labor at the same time. I believe India can be the best example of a country that is particularly popular in such services.

Finally, outsourcign allows to increase the quality of services. E.g., if you agree that mobile app development would be created by outsourced company which specialised solely on this field, it would be probably more successful than if this were created by our employees who might not be specialised in this narrow field of expertise.