Outsourcing: Reasons, Pros and Cons, Implications

What are some of the major reasons companies outsource?

Officially, companies from a diverse array of industries list many of the same reasons to outsource parts of their operation, including:

Lower Production and Operating Costs

Reducing cost remains the number-one reason that organizations elect to outsource. Virtually every company cites lowering costs as a primary driver. According to industry analysts at Gartner Group, 80 percent of companies name cost-cutting as the main reason for outsourcing.

Flexibility to Scale Resources Up and Down

One of the biggest benefits of outsourced customer care is flexibility. Partnering with an outsourcing company with a deep stable of agents worldwide enables a company to quickly scale up or down based on demand. Two of the biggest drivers that create this demand are seasonal spikes (Christmas, Valentine's Day) and marketing promotions.

Diversification and Increased Capabilities

Some companies want to keep part of their call center operations internal and outsource other parts, often because the company has experienced success running their operations internally, but is looking to supplement the program with outside expertise or geographies. Diversifying call center operations in this manner is an excellent way for companies to keep internal benchmarks in place to maximize the outsourcing results.

Improved Time to Market Capabilities Reduces the time to market (by outsourcing this process we can improve our time to market and responsiveness which will help us create a better competitive position in the marketplace).

Improved Focus on the Business. By outsourcing the less strategic but necessary functions, it allows management to strongly focus on generating value for