Cost Savings
Lower cost is one of the primary reasons for outsourcing. The cost savings are commonly based on the wage difference between the Western countries and offshore destinations such as India, China and the Philippines. Other factors such as economies of scale and specialization could also have a considerable impact.

Knowledge & Expertise
Outsourcing gives you access to knowledge pools that you might not have inside your own company.A good example is outsourcing your accounting by which you rely on the knowledge of external accountants instead of trying to develop such skills in-house. Outsourcing also enables you to focus on your company's core business and competencies.

Risk & Quality Control
Outsourcing agreements can be structured in a way that the responsibility to produce a certain quantity/quality of output is placed with the outsourcing provider, thereby giving you a better way of managing risk. The responsibility of the provider can be defined in so-called Service Level Agreements (SLAs).

Capacity Management
Outsourcing gives you a tool to manage your output or production capacity in a flexible way.

Staffing
By using external resources, you can overcome possible shortages in the job market. This is especially the case for highly specialized roles in areas such as the information technology industry. Outsourcing can also be a way of maintaining staffing flexibility, especially in countries that require long-term employment contracts, or heavy ancillary insurance, pension and welfare obiligations.

Time Zone Coverage
In using external providers, you can cover time-zones that are not covered by your domestic operation.