Outsourcing has been the buzz word for quite some time now. However there are various myths and misconceptions surrounding it which make us slightly wary of the process. Like any other business decision or strategy, it is not a perfect solution. But there are certain incentives involved which make it near perfect! Here are the top five reasons why outsourcing is a profitable exercise.

1. Focus on Core Business Areas - Outsourcing could be your means to make your business less cumbersome with activities that do not directly contribute to the growth of your business. By outsourcing non core areas of your business such as maintenance of IT infrastructure, help desk and customer care activities you can create space whereby you can focus on your core business strategies and decisions. Your in-house staff could also be employed in a more productive way if they are released of the burden of performing these related services. This is one of the top reasons of why outsourcing is profitable. No doubt around 40% of the Fortune 500 companies have already outsourced there business processes in varying degrees.
2. Cost effectiveness - Outsourcing is definitely one of the cost effective ways of getting quality service. Overseas labor is not only much cheaper but also highly qualified and efficient. However, you do not only save on actual dealings, but on various other related grounds. These include savings on the training and management of the employees and also on miscellaneous factors like air conditioning, floor space etc. Recent studies have shown that you can save 40-70% depending upon your onsite resources and your outsourced business.
3. Opportunity to Access Global Talent - Outsourcing could be one of the most effective means of accessing global talents related to various fields. IT is one of the major areas where outsourcing is being carried out. Top outsourcing markets like India and China have a large pool of highly qualified and competent technocrats. Many of them have experience of working abroad for many years and are very well-informed about U.S work environment. In countries like India, even language is not a barrier as it has a sizeable portion of English speaking professionals. This is one of the major reasons of why outsourcing should be undertaken.
4. Increasing Efficiency - Each and every organization has a limitation to its resources. Over-stretching of these resources to cover the supportive services is going to make them unproductive. On the other hand, your outsourcing partners would be working relentlessly to minimize the operational errors, the down times, and inefficiencies which might be plaguing your systems. This is a very relevant factor of why outsourcing is catching up with small and medium sized companies with fewer resources. Therefore not surprisingly a survey by InformationWeek has shown that around 20% of those surveyed considered IT efficiency as one of the major reasons for outsourcing.
5. Better Utilization of Capital Funds - Outsourcing helps in reducing capital investments and expenses. This is one of the major factors of why outsourcing should be done. Outsourcing also helps in reducing risks as your outsourcing partners and providers are specialists and are handling similar jobs on behalf of many clients. Therefore they are also more experienced than you on these grounds.

The concept of outsourcing can be considered a modification of the concept of division of labor. So, if undertaken judiciously, it can be a very productive and profitable business strategy.