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Outsourcing is contracting with another company or person to do a particular function
- It is an effective cost-saving strategy if used properly. It is cheaper to pay a third party provider than hiring a full time employee.
- Outsourcing is used in many areas such as Manufacturing, Customer Support, Human Resources, IT, Law etc…
- Although Outsourcing is criticised mainly for the loss of domestic jobs, its is beneficial to companies and businesses to allocate their resources where they are most effective.
- Eg: Today many top companies like Infosys, TCS, Wipro, WNS, Aditya Birla use this Outsourcing strategy efficiently
Sentence Formation:
Outsourcing a job to get it done more cheaply or building a machine to do it more cheaply is really the same.
Outsourcing is a practice used by different companies to reduce costs by transferring portions of work to outside suppliers rather than complete it internally.
Statement : companies typically save around 15 % due to cost reduction brought about from outsourcing .A 2014 study from Data mark inc. claims one client saved 31 % over one year.
Outsourcing involves subcontracting parts of a company’s value chain to other companies or contractors that specialize in those activities.
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