Outsourcing has developed a bad reputation in recent years due to the loss of American jobs to foreign countries, but the concept of outsourcing is much broader than that, and has many advantages.

First - some food for thought. Outsourcing doesn't just apply to businesses - it applies to people as well. In fact, we all practice outsourcing in our everyday life.

As individuals and families, we outsource food production to farmers, home construction to building contractors, production of electricity to power companies, and education of children to school systems. As you can imagine, there are literally thousands of ways we outsource. Some involve foreign labor, but most do not. Without outsourcing, we would likely be living in primitive conditions.

Businesses use outsourcing with the purpose of improving their ability to compete successfully in the marketplace. Commonly outsourced tasks include bookkeeping, payroll processing, telephone answering, 24-hour technical support, printing, insurance, legal services, etc. These tasks do not typically go to foreign companies - although they could - and with the advent of the Internet, this is happening with increasing frequency.

Here then are the top 10 advantages of outsourcing:

1. Reduced Labor Cost

Outsourcing can be the least expensive solution in a couple of different ways. 1) If you only need part-time or temporary help, but are unable to find anyone with the necessary qualifications without hiring them full-time, outsourcing to a provider who has highly skilled people that are shared among several clients can save you money. 2) If you outsource labor to a country with a low cost of living, you can also benefit from low hourly wages.

2. Reduced Overhead

When you outsource labor, you're also outsourcing all the overhead that goes along with it, including office space, furniture, utilities, computer hardware and software, telephone systems, etc. This is not only advantageous in terms of cost savings, but might be a life-saver if space for workers is not even available.

3. Access To High-Paid Talent

An outside provider may be your only solution if you need someone with particular skills such as computer programming or legal services. The outside contractor is able to provide this because costs are shared among all their clients. This is especially beneficial in a case where your only alternative would be to hire a full-time employee at a high salary.

4. Improved Quality of Service

Outside providers are usually specialists, meaning they focus their efforts on providing services you lack expertise in. This in turn allows your business to focus efforts on your own area of expertise. The outside provider is also usually able to provide a more consistent level of service than you could with in-house employees.

5. Risk Mitigation

Many functions related to your business, though not core to your business, are nevertheless critical to your success. For example, it may be essential that your customers be able to receive technical support 24 hours a day. You can provide this service through an outside provider who specializes in this.

6. Less "Employee Hassle"

This is one of the major reasons for outsourcing work to subcontractors. The hiring - and sometimes firing - of employees, along with the accompanying requirements of testing, training, record-keeping, payroll processing, tax-reporting, etc. is a headache that many businesses would rather outsource so they can focus on their core competencies.

7. Better Manpower Management

Businesses that experience a fluctuation in their man-power needs, such as during the Christmas or Summer seasons, can be assisted by an outside provider, who has access to a large pool of workers, and is more able to shift workers from one client to another. This eliminates all the extra effort required by the business to hire, train, and then lay off workers.

8. Access to Better Technology

Most small business can't afford to provide the latest technology for every employee. An outsourcing firm will more likely be able to do this as part of its core business.

9. Increased Productivity

This is related to the principle of mass production. It is generally more efficient to have an employee focus on performing the same task over and over than to have him wearing several "hats" and trying to perform a variety of tasks with equal efficiency. When you outsource a business function, you are turning it over to someone who can perform the task more efficiently because they focus on it and nothing else.

10. Focus on Core Activities

During periods of rapid growth, back-end product support often cannot keep up with sales. By outsourcing functions such as customer care, technical support, billing - and sometimes even production - the company is better able to focus on its core strengths which might be in the sales and marketing area.

Conclusion On the whole, the concept of outsourcing is a very good thing for any business. Nevertheless, your decision to outsource should not be taken lightly because their are some significant potential problems that can arise (see " Outsourcing Pros and Cons [http://bizgenius.biz/article/outsourcing-pros-and-cons] "). The wrong decision can be very costly for your company.