Maharashtra State BoardHSC Commerce 12th Board Exam
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Write Short Answers of the Following:State the Advantages of Outsourcing. - Organisation of Commerce and Management

Write short answers of the following:

State the advantages of outsourcing.

Advantages of outsourcing

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Solution 1

The advantages of outsourcing are explained as follows :
1. Efficiency and effectiveness : Many a time tasks are outsourced to the vendors who are specialised in their fields, having deep knowledge, experience, specific equipment and technical expertise. As a result the tasks can be completed faster effectively with greater efficiency and with better quality output.

2. Concentration on core business process : Outsourcing supporting the business processes, facilitates the
organisation more time to strengthen their business processes as they need not focus one non-core activities.

3. Cost reduction: Outsourcing reduces its own cost. Outsourcing avoids the need to hire employees in houses.
Hence, recruitment and operational costs can be eliminated of minimised.

4. Manpower available at low cost : In every organisation manpower is required to operate machineries, to do routine work, to perform jobs, to administer and manage business affairs. Recruitment and appointment of personnel on permanent basis are most costly. Manpower through outsourcing is available at a lower cost. Outsourcing is beneficial in some portions of business process.

5. Less investment requirement : Due to lack of expert labour, some portions of business process are outsourced
by the organisation. Similarly, to reduce or cut the cost, still some portions of business process are outsourced.
As a result organisation itself is required to manage only remaining portions of business process. Hence, investment requirements of the organisation is very less.

6. Knowledge sharing : Most of the times tasks are outsourced to the vendors who are specialised and expert
(knowledgeable) in their fields. While working together outsourced partners (vendors) share their knowledge,
experience, technical expertise, etc. with the employees of the organisation. This is one of the prime advantages
of outsourcing.

7. Stimulates entrepreneurship : Outsourcing encourages and stimulates entrepreneurship, employment and
expertness in the country from where outsourcing is done. [Any five]

Solution 2

Advantages of outsourcing.

Advantages of outsourcing.

Introduction: -In many big establishments, shops, markets or bazaars you will find security guard who are monitoring the parking around the place. These guards are not employee of the establishments but have been recruited through an agent. This agent provides the establishments with the services of the guards. In other words, the establishment has outsourced the security services.

Advantages of Outsourcing

  1.       It leads to better efficiency and effectiveness.
  2.       The companies are able to focus their attention on improving the quality of their product.
  3.       Outsourcing leads to cost reduction for the company. The cost of outsourcing services is much less than keeping such a large work force on the rolls of the company.
  4.       Manpower through outsourcing is available at a lower cost.
  5.       Investment requirements of the company are reduced.
  6.       Outsourcing helps in knowledge sharing between organizations.
  7.       It stimulates entrepreneurship, employment and exports in the country from where outsourcing is done.
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