01.REDUCE OPERATIONAL COSTS Access to outside providers’ lower cost structure is one of the most compelling short-term benefits of outsourcing. In an Outsourcing Institute survey, organizations reported that on average they saw a 9% reduction in costs through outsourcing.
02.OPPORTUNITY COST Partnering to deliver IT infrastructure and operations at the desired metrics levels free up management and staff time which is needed to focus on core competencies and strategic initiatives.
03.MAKE CAPITAL FUNDS AVAILABLE Outsourcing reduces the need to invest capital funds in non-core business functions. This makes capital more available for core areas. Outsourcing can also improve certain financial measurements by eliminating the need to show return on equity from capital investments in non-core areas.
04.RESOURCES NOT AVAILABLE INTERNALLY Companies outsource because they do not have access to the required resources within. For example, if an organization is expanding its operations, especially into a new geographic area, outsourcing is a viable and important alternative to building the needed capability from the ground up.
05.FUNCTION IS DIFFICULT TO MANAGE IT traditionally requires a significant investment in staff, management and tools in order to execute well. Rather than make those investments, outsourcing is a good option for delivering results while not having to manage the function.