I am sure that you already are familiar with term “outsourcing”. This term is more and more common. Usually people know intuitively what it means, but are not able to explain it if somebody asks. Many of people, that I known, don’t also understand why enterprises decide to use outsourcing.
I have often answered the following question – why do enterprises pay for an external enterprise to do something that they could do by themselves? I need to admit that this logic may seem to have a point – if external enterprise can earn money on doing something for our company, why won’t our company conduct this by themselves?
I am going to do my best to explain that on the following example. Assume for a while that you posess a enterprise which invents and produces new mobile phones. You are thinking about outsourcing managed services- check examples. Thus, you are looking for a rewarding company that works in the area of mobile app development- see information. What can your company gain if you decide to do this?
To begin with, you could reduce costs. Developing new advanced producst would require employing plenty of specialists which are very expensive as employees. It would be much more beneficial to posses to outsource an external company that is specialised in that area and already has needed professionals. Because of that, that is highly likely to be cheaper to outsource an external enterprise, than to employ specialists within the structure of your organization. That is 1 of necessary factor that makes enterprises use outsourcing.
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The prime target is cost cut. Apparently, not the only one.
However, firms may cut down labor costs also by outsourcing services from an external company which is placed in the foreign country. Obviously, it has to be country which has very well qualified proffessionals but lower cost labor at the same time. I think India is the best example of such country which is particularly trendy in such services.
Eventually, outsourcign allows to increase the quality of services. For instance, if you decide that mobile app development would be created by outsourced firm which specialised solely on this field, this will be definitely more successful than if this were developed by our employees who might not be specialised in that narrow field of expertise.