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Tactical Reasons for Outsourcing
Control operating costs: One of the most talked about advantages of outsourcing is the cheap labor costs. Processes outsourced are done at much cheaper rates and same quality levels as in the current location. This translates into major cost savings for companies. They also save on operational costs such as payroll, administrative costs, HR, power, rentals and utilities as processes move to other locations.
Improve operational performance: Companies outsource to vendors who have domain expertise in the outsourced process. Their experience in the field translates into greater operational efficiencies for the outsourcing company.
Overcome seasonal workflows: Industries in the U.S. are subject to seasonal fluctuations in work and lack of workers during holidays and off-seasons. One of the advantages of outsourcing such processes is that companies can deal with peak workloads and poor staff strength during vacations and holidays.
Why Outsourcing is still popular
Despite outsourcing having come into a lot of controversies in recent times, industry watchers predict that outsourcing as a business practice is on a growth mode. More and more companies are drawing up plans to outsource work. The trend is clearly in favor of outsourcing larger volumes of work. Vendors are moving up the value chain to include in their service offering a range of additional services that require greater skills, research support and expertise.