“Thanks to new technologies, executives can divide up their organizations value chains, handle key strategic elements internally, outsource others advantageously anywhere in the world with minimal transaction costs, and yet coordinate all essential activities more effectively to meet customers needs” – Quinn et al.
Overview and Expected Benefits
The Outsourcing Lifecycle and Key Considerations
Potential Benefits of Outsourcing
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Outsourcing is contracting with a third-party for a specified period of time to perform work or take over an activity that was previously performed by in-house staff
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The term outsourcing is generally reserved for situations where, in addition to providing resources and expertise, the vendor (outsourcer) takes direct responsibility for the daily operations of specific portions of an organisation’s operation. This is the primary contrast between outsourcing and purchasing. The outsourcing vendor not only supplies the resources for its portion of the operation, but it also assumes accountability for providing a predefined level of service to the organisation. This mixture of resources, expertise and accountability is the foundation for the major benefits that can be gained from outsourcing.
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Updated on January 17, 2003
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