Why Businesses Outsource
One key consideration is that when we outsource to local providers, the work or services that we outsource are not core to our businesses. The question is why are they not core? Here are some key reasons:
1. The service provider provides services to multiple customers, and thus is not overly depend on us for the business. That makes it easier for us to come and go as we please with regard to the service.
2. The size of the expense of this outsourced service is relatively small fraction of our total expenses.
3. There are small differences among providers of those services, and if we wanted, we could switch to another provider without too much cost or inconvenience.
4. There is a skill or capability that the providers gives us that we could not duplicate ourselves at lower cost.
Nearly all businesses outsource something and usually a whole set of services. If we could learn from how we handle those, we could perhaps find other areas that could strategically help our organizations if we would see that we actually have some outsourcing expertise.
What areas within your organization do you outsource? What are some other possible areas that you could outsource, if you could realize that you actually have outsourcing expertise?