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The Benefits of Outsourcing

As companies face an increasingly competitive marketplace and strive to effectively manage the shrinking product lifecycle, the outsourcing of none-core manufacturing applications has become an important strategy.

Companies are learning that in order to gain a competitive edge it is necessary to keep ahead of change.  “Today’s customers want rapid results, expecting service excellence and demanding a broad understanding of increasingly complex technological changes, products and services,” said Murton System Technologies MD Brent Maurer.

The electronics outsourcing industry, estimated to have been worth $100-billion in the US in 1998, and valued at more than double that today, is growing at over 20% annually.  In the process of doing so, the industry is becoming an increasingly larger portion of the electronics industry, representing over 21% of the total industry. 

“Both large and small companies are grappling with how best to meet expanding demand, address increasingly tighter product time-to-market and stay ahead of technology obsolescence.  Some have found a solution in outsourcing in areas ranging from improving products and services to reducing debtors and stock.

KPMG, in a survey in association with Africon says outsourcing-manufacturing services allows companies to focus on product development and design, marketing and customer needs.  It is more a key component of modern business philosophy.  The virtual company of tomorrow will be built out of today’s outsourcing experience.  Those getting it right are ahead of the game.  Those getting it wrong will not be in business, it's that simple.

Research has estimated that some form of "outsourcing" - handing over part of your operations to an outside contractor - is used by up to 85% of British firms. In other regions of Europe less than 25% of business outsource their non-core functions.

It is expected that over the next 24 months the top 10 companies in each US major industry will be seriously considering expanding their outsourcing.  Companies are increasingly looking at how they can add value to their businesses and today’s customers want access anytime from anywhere and a one-call solution provider,” said Maurer.

"Many markets are still going through a period of education and have a way to go. Nonetheless, some have woken up and there are some great opportunities out there,” he concluded.

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