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Essay / Research Paper Abstract
This 3 page paper is a concise consideration of the advantage and the disadvantages of outsourcing, looking at a range of factors include, but are not limited to cost specialization, risk, opportunity cost and flexibility. The bibliography cites 3 sources.
Page Count:
3 pages (~225 words per page)
File: TS14_TEoutadv.rtf
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Unformatted sample text from the term paper:
if the services or processes that are outsourced were carried out within the firm. One of the first and basic reasons for outsourcing to take advantage of lower costs, in
many countries such as India, there is a high differential in the costs pf providing the services. In 2003 70% of the outsourcing services for software performed by Indian companies
was the direct result of US companies outsourcing (Kripalani et al, 2003). For this level of outsourcing to take place the cost advantages must be significant. The cost
benefits come from a range factors. The first and most apparent is that issue of lower wages. However, it is not only low wages that are beneficial, there are lower
overall employment costs. The overheads, such as facilitates and other benefits that need to provided are also lower. The overhead costs may also be lower, such as cheaper land and
development, fewer restrictions or bureaucratic procedures for development of a site and the employers or company liabilities may be less stringent. These benefits alone may lead to companies looking
off shore to undertake some operations, taking jobs from the home nation, but outsourcing is more than simply moving production or provision of services off shore it is shifting those
services to a third party supplier. The benefits for off shore outscoring is that the supplier will be able to benefit from these lower costs and comparative advantages and will
be able to pass some of those savings in the supply contract. It should also be remembered that outsourcing does not always mean off shoring, and as such costs such
as lower wage and associate costs are not the only potential benefits. The benefit is not only the direct costs, but the
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