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Ans. Outsourcing is a process in which the particular process, function, or operation of the organization is transferred to the other individual or organization who has specialized skills and expert knowledge in that particular area of operations. This helps in reducing the cost that is associated with a particular job function. The cost of labor is very high in developed countries which makes it necessary for the organization to outsource the business to some other organizations that are operating in developing countries where the labor is available at very cheap rates. The other reason of outsourcing some of the business operations, projects, or part of the project is that when the work is outsourced it is done by the people who have expertise in that area this helps in improving the quality of the products. Improvement in the quality of products leads to an increase in the satisfaction level of the customers which results in the increased demand for the product and brings customer loyalty in the organization. Customer loyalty leads to retention of customers in the organization for a long time. Outsourcing provides various benefits and advantages to the organization. It helps the organization to focus on the core activities of the business by outsourcing the tasks that are of less importance. It saves cost on technology and infrastructure as well.
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