OUTSOURCING: THE BENEFITS AND THE RISKS
OUTSOURCING: THE BENEFITS AND THE RISKS

Summary/Abstract: The goal of this paper is to analyze and structure the most wanted benefits and the most dangerous risks of outsourcing. The research is primarily based on professional literature reviews. The benefits are well known and most businesses count on them when launching into outsourcing. They generally aim cost reduction, access to new technologies, focus on core competences or improve customer service. It is quite difficult to accurately quantify the total benefit generated by outsourcing, but all companies that use outsourcing as a business strategy are well aware of the possible benefits. The risks are generally less spoken about, but equally important. Hidden costs, violations of the outsourcing contract, loss of customers/opportunities, potentially conflicting interests are just some of the most frequent outsourcing related risks. Moreover, we are offering a set of methods for reducing or even avoiding some of the most dangerous risks of outsourcing. The most popular method to minimize risks is a close cooperation between the companies involved in the outsourcing process. The contribution of this paper refers to organizing the main benefits and risks related to outsourcing provided by the literature.

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