| • Reduce or control operating costs
|
| The single most important tactical
reasons for Outsourcing is to reduce or control operation
costs. Access to an outside provider's lowers cost structure
is one of the most compelling short-term benefits of
Outsourcing. In a recent Outsourcing Institute Survey,
companies reported that on an average they saw 29%
reduction in costs through Outsourcing. |
| • Make Capital Funds Available
|
| Outsourcing reduces the need to invest capital funds in non-core business functions. This makes additional capital funds available for core areas. Outsourcing can also improve certain financial measurements by eliminating the need to show return on equity from capital investments in non-core areas.
|
| • Generate a cash infusion |
| Outsourcing can involve the transfer of assets from the customer to the provider. Equipment, facilities, vehicles and licenses used in current operations all have a value and are, in effect, sold to the provider as part of the transaction, resulting in a cash infusion.
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