Essay about Benefits Of Cutting Costs And Saving Money

1139 Words Aug 6th, 2016 5 Pages
Organizations today are facing unprecedented challenges: economic uncertainty, market complexity, hyper-competition, changing consumer expectations and regulatory pressures. More organization choose to outsource their work to suppliers in other country because of these challenges combine with many other reasons. Some of the reasons have to do with the belief that there will be the great benefits of cutting costs and saving money in order to gain more of a profit at the end. With the possible benefits of outsourcing, there are also risks these companies have to take into account. Benefits can outweigh the risks if enough research about the suppliers and stability of the supply chain is done before they are selected and then if they are monitored correctly; however, when outsourcing a large percentage of your manufacturing and design to many foreign suppliers it can lead to major issues that end up outweighing the benefits. Rudzki et al. (2005) cover the significant importance of outsourcing as part of supply chain management and acknowledge the enormous role in raising customer satisfaction, driving higher profit margins, and fueling growth otherwise known as increasing company profitability.
There are various categories of outsourcing. However, the most typical and the widely used types of outsourcing are BPO (Business Process Outsourcing) and ITO (Information Technology Outsourcing). Generally, these two types of outsourcing business were operated by the largest…

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