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Outsourcing / Why?
Every firm has certain essential capabilities "core competencies" which it understands better than anyone. To successfully achieve whatever endeavor it is necessary to have abilities in many areas. It does not always make financial sense to build internal expertise in all such areas and hence it often makes more financial sense to subcontract.
Advantages
Reduce costs, fixed and capital expenses, as lower investment is needed to undertake projects.
Allows your firm to maintain a smaller more flexible core team, avoiding contracting personnel and allowing you to quickly adapt to current needs.
Subcontracting allows access to new business opportunities in diverse technologies and skills without the need to build skills in these areas.