Question

Explain how outsourcing is a sound approach to gaining capability outside of a company's primary area of expertise.

Answer 1

Outsourcing is a practice used in business in which a company hires another person or firm called as a third-party provider to provide services or handle operations that were previously done by the own employees of the company. This is done mainly to reduce costs or improve efficiency as the third party is focused only on that task.

So, when a company wants to perform an operation that is not their main area of expertise, which means that the employees aren’t skilled enough and require training to perform it adequately. So, rather than utilizing money, resources and employee time in learning a new task, a third-party provider can be hired by the company to do the same. This will save both time and money.