The introduction of outsourcing has offered tremendous benefits in the world of business. Surveys have shown that almost 90% of companies attribute their improved productivity and profitability to their strategic shift of operational functions to outsourcing their supply of manpower. Their move enables them to focus on their core business at lower costs. A good example of this is in expanding their business. With outsourcing, they capitalize on the availability of the lower labor costs for their manufacturing and telemarketing functions.
To benefit most from outsourcing, it should be viewed as a strategic collaboration between the company (management) and its outsourcing partner. Remember that this partnership works best when it is managed in the manner it is designed to be. The particular areas that the company and its outsource partner are responsible to should be clearly defined.
The company takes full responsibility of the core competence of the business while its outsource partner should concentrate only on those areas that are non-critical or merely supportive functions to the business. These may include accounting, data processing, and human resources, among others. Despite the importance of these functions in the overall set-up of a business, they are not considered as its core competence or principal purpose.
The core competence of any business is often referred to as its function that deals directly or gets closest to the customers. This is best illustrated in the case of newspaper publication. The core competence or principal purpose of the publisher is to reach and inform its readers and the part of its business that does that is its editorial. To safeguard this core competence, the publisher should see to it that the editorial section is under its direct control and supervision. It should not be outsourced to a third part. However, auxiliary or support functions like printing, sorting, binding, or delivery are better done by outsource firms for more efficiency and lesser cost in manpower.
Perhaps, cost effectiveness may be the biggest advantage in outsourcing, but the company should not sacrifice its control of core business to any third party. The level of dependence of a company to its outsource partner is based on several factors 
such the type of business and the importance and scope of support functions involved in its operation. However, the company should see to it that the initial benefits are maintained throughout the partnership. This can be done with frequent quantitative assessment meetings on outsourced services for the evaluation of both the price and non-price benefits and costs.
In drawing the strategic collaboration between the company and its outsource partner, these factors should be considered to ensure its success. The benefits to a company of outsourcing are dependent on its proper management as one strategy in running the business.