Question

What are the advantages of outsourcing non-critical, and sometimes even critical, value chain activities?

Answer 1

The advantages of outsourcing non-critical and critical advantages of value chain activities are:

1. Increased efficiency - As outsourcing is done to organizations who are professionals in the field and therefore ideally it can be expected that the efficiency will be increased.

2. Going a step ahead - Outsourcing actually helps to go a step ahead as there are capabilities that may be reached which was not possible previously by the organization itself.

3. Controlled costs - The cost is fixed and controlled because as it is outsourced to external organizations, then there is a control on the cost aspect.

4. Competitive advantage - The organization may possess a competitive advantage over others in this aspect as the processes are made better with better facilities and efficiency from the external organizations.