Things to Know When Outsourcing Essay

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Things to Know When Outsourcing Kendra Wise BUS 630: Managerial Accounting John Kuhn 8-6-2012 Introduction Today’s business world has changed dramatically due to technology and other global advantages, making the business market even more competitive. In order to be successful it is important to gain a competitive edge over other companies that are producing the same or similar products. One business aspect that has become popular in allowing businesses to get ahead is outsourcing. Outsourcing according to BusinessDictionary.com is defined as a contracting, sub-contracting or externalizing non-core activity or activities done to free up cash, personnel, time, and facilities for activities in which, a company holds a competitive advantage (2011). Outsourcing however does not always indicate an increase in profits. A business needs to decide if outsourcing is the right answer for their company by weighing positive and negative factors. In order to better understand how outsourcing can affect ones company the following things will be addressed in ones paper, which are: the advantages, the disadvantages/issues, how it can be applied, and some examples of businesses that have outsourced. Advantages of Outsourcing As mentioned in the above paragraph, deciding if outsourcing is an advantage or disadvantage should be a business’ number one priority. In other words if it helps your business gain, then you should consider doing it, if it hinders it, then one suggest finding another solution. According to Meyer’s article entitled, “4 Advantages to Outsourcing,” there are four advantages that should be considered when determining whether or not a business should use outsourcing (2005). These four advantages are the following: saving money, sharing the risk, accommodating peak loads, and developing an internal staff. Saving money helps businesses to gain instead

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