Outsourcing is a business practice in which services or job functions are farmed out to a third party. In information technology, an outsourcing initiative with a technology provider can involve a range of operations, from the entirety of the IT function to discrete, easily defined components, such as disaster recovery, network services, software development or QA testing.

Outsourcing benefits

  • Lower costs (due to economies of scale or lower labor rates)
  • Increased efficiency
  • Variable capacity
  • Increased focus on strategy/core competencies
  • Access to skills or resources
  • Increased flexibility to meet changing business & commercial conditions
  • Accelerated time to market
  • Lower ongoing investment in internal infrastructure
  • Access to innovation, intellectual property, and thought leadership
  • Possible cash influx resulting from transfer of assets to the new provider
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