Outsourcing allows organizations to focus on their core business and can create a competitive advantage by reducing operational costs. The beauty of outsourcing is you can outsource an entire function or only a part of it. This can provide an organization with a good balanced on-site support for employees. Organizations use outsourcing as a strategic initiative to improve customer service, quality and reduce costs. Outsourcing can be a permanent or temporary arrangement to bridge the gap in staffing, to learn better quality techniques or improvement of faulty product design.

• Employee compensation costs.
• Overheads to the employee cost.
• The cost of maintaining the IT department, in terms of time spent by internal high value IT resources, in managing the routine IT operation.
• The cost of non-productivity.
• Manning cost: If the IT operation is in-sourced.

Outsourcing allows organization to focus on their expertise and core business. When organizations go outside their expertise, they get into business functions and processes that they may not be as knowledgeable about and could potentially take away from their main focus.

Improved quality can be achieved by using vendors with more expertise and more specialized processes.
The advantage of having a vendor contract is they are bound to certain levels of service and quality.

Outsourcing gives an organization exposure to vendor specialized systems. Specialization provides more efficiency that allows for a quicker turnaround time and higher levels of quality.