The global economic uncertainties and the need to be competitive have ignited the desire of many organisations to reengineer or transform their business models by the use of outsourcing methodology. Outsourcing is defined as the strategic utilisation of external resources to undertake existing business processes or functions that are traditionally performed by internal staff and resources, and purchasing these specialized skills and expertise from independent suppliers as a service vis-à-vis capital expenditure.
Some of the major reasons why companies decide to outsource their business processes or functions are to reduce and control operating costs; improve focus on core business competencies; re-deploy internal resources to handle higher priority areas; gain access to more experience and knowledge, larger talent pool and sustainable source of skills; improve overall quality by leveraging new service level agreements; and manage capital better by transferring the risk of excess capacity to the service provider.