The reasons for outsourcing are many—which ones, and to what extent they are cited and form the basis for outsourcing, depend on the nature of work being outsourced. The following list provides the most proven reasons for which companies in the U.S., Europe, Japan, and South East Asia outsource manufacturing and delivery of products and services to outsourcing destinations such as India, China, Pakistan, the Philippines, South Africa, Brazil, and Israel.
Outsourcing turns fixed costs into variable
Cross leverage of skills
Outsourcing vendors can cross leverage their skills and expertise across industry and technologies to achieve greater efficiency and quality levels in the outsourced process. In this context, outsourcing can be “value- added”. For instance, there are many outsourcing vendors that provide legal, software, medical transcription, and accounting outsourcing from a single window.
Ease of employee responsibility management
By outsourcing, a company need not be burdened with administrative and HR-related issues regarding present and future employees working in an outsourcing unit of a company. The responsibility and accountability for employee management shift to the outsourcing vendor after a company signs up with an outsourcing vendor.