It is virtually impossible to generalize why organizations outsource various business processes. The final outsourcing decision depends on whether the CEO, CFO, or CIO initiates the outsourcing proposal. Whichever executive initiates the outsourcing proposal, a reduction in __________________ is usually the primary driver.

Question

Quizplus · Accepted Answer

A reduction in direct operating costs is usually the primary driver for outsourcing. Direct operating costs are the costs that are directly associated with the production of goods or services. These costs include things like raw materials, labor, and utilities. By outsourcing certain business processes, organizations can reduce their direct operating costs by eliminating the need to purchase these inputs themselves.

It Is Virtually Impossible to Generalize Why Organizations Outsource Various