What is the number 1 reason for businesses to outsource anything today?

In the “old days”, 10-15 years ago, cost was the number one motivator for outsourcing a variety of business operations. Cost may very well be on the top 10 list of reasons to outsource today but more and more companies have discovered other benefits for outsourcing their manufacturing and other business operations. Here are a few of the other benefits:


1. Access to other technologies

2. Reduced in-house capital equipment expenditures

3. Allowing corporate to focus on developing/marketing new products rather than fixing manufacturing issues

just to name a few.

Cost is not the only reason we outsource today, for sure. Companies have found the benefits to increased profitability not only lies in the immediate returns that were initially gained in outsourcing but using outsourcing allowed them to focus and develop aggressively to hit their markets harder with new products while essentially relying on other companies to do their part of the process which supports the bigger strategic picture.

Typical functions outsourced have been IT, HR, design engineering, recruiting and so on. It’s time for companies who outsource their manufacturing to realized more benefits can be had by outsourcing their subcontractor governance functions as well. To do this successfully you need to find people that can quickly align and understand your corporate culture, someone on the ground where your manufacturing is and people who have a demonstrated record of accomplishment in operational improvements.