Question

Cost __________ is a major advantage of outsourcing project work because companies can secure competitive prices for contracted services, especially if the work can be outsourced offshore.

Answer 1

Cost reduction is a major advantage of outsourcing project work because companies can secure competitive prices for contracted services, especially if the work can be outsourced offshore.

Outsourcing is a business practice of employing a third party to take over tasks that were originally performed by direct employees of a company. Outsourcing is usually done as a cost reduction method including but not limited to salaries, technology, expertise, taxes, and equipment. This is possible because different organizations have different compensation structures for their employees which allows the outsourcing company to secure competitive prices for the contracted services.

Offshore outsourcing is generally an even more lucrative option as it offers expertise from around the globe, quality services with lower costs due to different costs of living, and around-the-clock services due to different time zones among other benefits.

When used properly, outsourcing is a highly effective strategy for cost reduction and provides a competitive advantage.

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