Question

Justify the following statement.

Outsourcing is important.

Answer 1

1. Outsourcing is a process of contracting business function or specific business activity to specialized agency. 
2. A firm mostly outsources non-core areas such as sanitation, security, household pantry etc. The outsourcing enables a firm to focus on its core areas.
3. The outsourcing also leads to reduction of cost and ensures availability of expertise. 
4. The various advantages associated with outsourcing are as follows:

1. Overall cost advantages
2. Stimulates entrepreneurship, employment and exports
3. Low manpower cost 
4. Access to professional, expert and high-quality services
5. Emphasis on core process rather than the supporting ones
6. Reduced investment requirements
7. Increased efficiency and productivity
8. Sharing of knowledge

Hence, outsourcing is important.