I am sure that you already are familiar with term “outsourcing”. It is more and more popular. Usually people know intuitively what that term means, but cannot explain it futher. Many of people, which I talked to, don’t also understand why companies use outsourcing.
I have often heard the following thing – why would companies pay for any external company to do things that they are able to do by themselves? I have to admit that the logic may seem to have a point – if external company can earn money on doing an activity for us, why won’t our firm conduct this by themselves?
I would do my best to present this on the following example. Imagine for a while that you posess a enterprise that invents and creates new mobile phones. You are wondering about outsourcing managed services- http://smtsoftware.com/en/services/managed-services. Thus, you are looking for a favourable company that works in the area of mobile app development- see information. What can you gain if you decide to outsource?
To start with, you could reduce costs. Developing new complex producst will require employing many professionals that are very expensive as employees. It would be a lot more profitable to posses to outsource an external company that specialises in this area and already owns needed professionals. Thanks to this, this is highly likely to be low-priced to outsource an external firm, than to hire specialists within the structure of our enterprise. That is 1 of substantial factor that makes firms go for outsourcing. The main aim is cost cut. Certainly, not the only one.
Nonetheless, companies may lower labor costs also by outsourcing services from an external firm which is based abroad. Certainly, it has to be country which has very well qualified proffessionals but cheaper cost labor at the same time. I believe India is the best example of such country that is exceptionally popular in such services.
At the end, outsourcign allows to develop the quality of services. For example, if you decide that mobile app development will be created by outsourced company which specialised just on this area, it will be probably more successful than if this were developed by our employees who are not specialised in that narrow area of expertise.