Companies that outsource services save on
a)Man power costs
Compared to the inhouse manpower costs, such costs at the service provider’s end are nearly always lower, the persons
working on the assignment are specialists in their own field and no extra costs are incurred on extra office staffing.
b)Reduction in capital expenditure
Companies need not invest in expensive hardware and software which they may not be able to fully utilize particularly
in case of high-end specialized software.
c)Lower overhead and operating costs
Reduced manpower and
infrastructure leads to a direct effect in the reduction
of overheads and operating costs.
Companies can off load non-core functions and be more focused on critical activities. Engineering firms can focus on
schematic designs, equipment selection, meeting with clients, construction administration, and pass on the detail
engineering, drafting, analysis and other engineering services to specialized service providers that can do it more
economically. Companies can utilize the resources thus saved to concentrate on increasing business and market share.
Use of extensive skilled and qualified personnel
Companies that outsource services have the advantage of having access to a wide variety of skilled and qualified personnel
across various disciplines without having them on their payroll as permanent employees.
Outsourcing providers employ manpower that is much cheaper and usually more skilled than the companies that have outsourced work
to them. This leads to improved performance for the outsourcing company as it has the advantage of having its work executed by
more resourceful personnel.
Access to advanced technology at no extra cost
You can get access to the most advanced infrastructure and technologies at no extra cost when you outsource. This
leads to your work being carried out on the latest technologies and thus increases the level of your service.
“ Companies are doing it because they feel they can get better quality work for 50 percent of the cost.
This is another way of making the US economy more efficient, more competitive, and more prosperous. Global
Outsourcing is a growing business, in the past; US companies relied on foreign workers with H-1B visas to
reduce costs. Now they are focusing on offshoring.”
- Bob Pryor, Vice-President and Head of Outsourcing practices
for Cap Gemini Ernst and Young
This site is best viewed in 1024 X 768 resolution.
Engineering Services Pvt. Ltd. Mumbai (Bombay) India - 2009 All Rights