Good day friend,
 As time goes on, i would be discussing about the above topic extensively and also seek contributions, questions and answers. I am positive this would be a great forum for both business owners and young entrepreneurs in time to come.

Hello

Hi again Friend,
Sorry I have been away for some time now. Let's quickly take a brief look at our topic as we break it down bit by bit. I hope to get your comments and questions along the line as we take on this important topic. Outsourcing is often viewed as involving the contracting out of a business function, commonly one previously performed in-house to an external provider. In this sense, two organizations may enter into a contractual agreement involving an exchange of service and payment.

Organizations that outsource are seeking to realize benefits or address the following issues:

1. Cost Saving
2. Focus on Core Business
3. Cost Restructuring

4. Improve Quality
5. Legal Binding Contracts
6. Operational Expertise

10. Reduce Time to Market
11. Com-modification
12. Approach to Risk Management
13. Scalability

Outsourcing should bring down prices, providing greater economic benefit to all. In our next post we shall be exploring the above mentioned benefits of outsourcing services. Please feel free to drop your comments and questions, we appreciate them.

What Is Outsourcing And The Value Proposition For The Organization?

In simple terms, ‘outsourcing’ can be defined as the ‘strategic use of outside resources
to perform activities traditionally handled by internal staff and resources’.

It is a management strategy by which an organization outsources major, non-core functions to
specialized, efficient service providers (The Outsourcing Institute, 2001).

The value proposition that companies look to achieve from outsourcing activity can be
viewed from a number of different aspects. From the view of control and automation
services on the plant floor, Automation Research Corporation (ARC, 1998) defines the
value proposition (potential benefits) of outsourcing to an organization as being
expressed in four fundamental business concepts:

1.) Focus on Core Competencies, which define the organization itself, and are a vital part of why it exists.
2.) Gain Access to World Class Expertise in designing, implementing, and maintaining automation systems, and keeping up with the latest technologies available.
3.) Improve Staffing Flexibility in order to respond quickly and inexpensively to changes in market demand.
4.) Lower Total Cost of Ownership for Control and Automation Systems. The ongoing operational costs are significant, up to 75% of the lifetime costs, providing an opportunity to reduce Total Cost of Ownership (TCO) of these systems.