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Outsourcing: advantages, disadvantages; future for outsourcing, global trends

1. What are the advantages and disadvantages of outsourcing?

2. Is Ireland an outsourcing customer or vendor? What are the factors that determine this position?

3. What does the future hold for outsourcing? What are the main global trends?

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1. Advantages and disadvantages of outsourcing?

Outsourcing is simply the concept of taking internal company functions and paying an outside company (which is generally more specialized and has more expertise) to handle these operations. Outsourcing is generally done to save money and improve quality, or free company resources for other activities.


Outsourcing gives the opportunity to the firms to lower overheads with lower staff investment. In this way companies can be able to reduce costs related to staffing issues such as salary, training, management, recruitment and administration. Thus the funds can be saved or redeployed in other areas of the different departments to improve productivity or simply enjoyed as increased profits as resources are allocated more efficiently. Besides purchasing services from others can weaken the dependency on the current personnel. If output remains constant, the need for staff employment will decrease. Outsourcing can convert fixed costs into variable costs. So it can release the capital for investment elsewhere in the organization and facilitates a way to avoid large expenditures. With capital costs controlled and more money directly pumped into revenue-producing ...

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