What are the pros & cons of outsourcing to third party vendors?

What are the pros & cons of outsourcing to third party vendors?


Advantages

  • Focus on core business issues.
  • Benefit from best-of-breed solutions.
  • Better quality at lower costs.
  • Better process maturity, resource flexibility and economies of scale.
  • Flexibility in deploying new technology.
  • Quick wins with outsourcing.
Disadvantages

  • Burden of excess capacity or challenge of insufficient capacity is done away with.
  • High unit personnel cost.
  • Tight business margins.
  • Not enough financial muscle to sustain very tight payback periods.

Source: neoIT




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