Why Source?
The decision to source out is often made in the interest of lowering firm costs, redirecting or conserving energy directed at the competencies of a particular business, or to make more efficient use of labor, capital, technology and resources.
Organizations that outsource are seeking to realize the following benefits:
Cost savings The lowering of the overall cost of the service to the business
Cost restructuring Operating leverage 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
Improve qualityAchieve a step change in quality through contracting out the service with a new Service Level Agreement
Knowledge Access to intellectual property and wider experience and knowledge
ContractServices will be provided to a legally binding contract with financial penalties and legal redress. This is not the case with internal services
Operational expertiseAccess to operational best practice that would be too difficult or time consuming to develop in-house
Staffing issues Access to a larger talent pool and a sustainable source of skills