Figure 2

Strategic Reasons for Outsourcing Improve business focus. Outsourcing lets a company focus on broader business issues while having operational details assumed by an outside expert. Access to world-class capabilities. By the very nature of their specialization, outsourcing providers bring extensive worldwide resources to meeting the needs of their customers. An organization with world-class capabilities offers access to new technology, tools, and techniques; increased career opportunities for personnel who make the transition to the outsourcing provider; more-structured methodologies, procedures,and documentation; and competitive advantage through expanded skills. Accelerated reeingineering benefits. Outsourcing is often a by-product of business process reengineering. It allows an organization to realize the anticipated benefits of reengineering by having an outside organization -- one that is already reengineered to world-class standards -- take over the process. Shared risks. There are tremendous risks associated with the investments an organization makes. When companies outsource, they can be more flexible, dynamic, and adaptable to changing opportunities. Redirection of resources. Every organization has limits on the resources available to it. Outsourcing permits an organization to redirect its resources from noncore activities toward activities that have greater return in serving the customer. .

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