Methods and concepts for Value Based Management (VBM)
Outsourcing is a strategic management model transferring business processes to another company. The concept is to have the management and/or day-to-day execution of one or more business functions performed by a third party service provider, who is insourcing those same processes. Outsourcing occurs when a company uses an outside firm to provide a necessary business function that might otherwise be done in-house. Its aim is mostly to make an organization more competitive by staying focused on its core competencies.
It is different from subcontracting because the function is provided on an ongoing basis, rather than for a specific project. It can be provided on or off premises, in the same country or in a separate country (Offshoring). In its most advanced form, outsourcing makes it possible to build a large, entirely virtual company with only a single employee: the entrepreneur.
Potential Benefits of Outsourcing: