GNN International

The cost savings associated with strategic outsourcing not only give a business an edge over its competition but has become crucial for the survival of many businesses. From the more obvious benefits of cost reduction and quality improvement, outsourcing delivers a client a number of advantages all the way up to value generation and innovation capability in core competencies. The five key considerations are: Cost: The cost benefits of outsourcing are obvious in terms of cheaper labor and material costs. In case of variable sourcing contracts, the costs can be reduced further in the form of higher productivity of employees. Quality: Most outsourcing vendors have a better process maturity in their core areas as compared to the client. As a result, such vendors can deliver high quality products. Time to Market: One of the major benefits of outsourcing is to reduce the time to market for any products or services of the client. Focus on Core Competencies: The whole objective of outsourcing is to enable the client company to enable the client company to concentrate on its core competence. By outsourcing your products to a company that specializes in that area, the client company significantly reduces its management involvement in production issues, thereby freeing such resources for core business activities. Value Generation: In order to extract more value from its products, the company can measure the return on its investment. By doing so, it becomes clear to both the vendor and the client as to what are the key value parameters for the project and for the outsourcing relationship. This in turn helps both parties to monitor and plan for maximum value in the engagement.