Outsourcing has fostered the concept of ?core? activities staying within an organisation (Domberger 1998). According to the Australian Government Publishing Service (1996), outsourcing is when an organisation opts to have an ?activity or function? performed for them by an external agency, which has overall responsibility for the activity. Directly related to core competency in outsourcing is the desire for increased efficiency. Similarly,

Cost saving is a third benefit of outsourcing. Johnson (1997) says it reduces and controls operating costs through access to the contractor?s lower cost structure. In addition, outsourcing often involves transferring assets, like equipment and licences, which results in a cash payment (Johnson 1997; Keppler 1998). Other reasons for cost saving include the ability to provide services at a lower cost than is feasible internally, being able to make costs more predictable and therefore controlled, and transforming to variable costs. This transformation allows a firm to increase or decrease costs in times of profitability or loss (Keppler 1998). While saving costs is important, Johnson (1997) cites Corbett (1997) who believes ?the process [of outsourcing] - properly and professionally applied - can only be beneficial to today?s business, and is a great deal more than a cost-cutting exercise?.

Transition costs include the costs of searching for vendors, transactions, and longer response times to problems (Domberger 1998; Klepper 1998). According to Johnson (1997) the crucial question is not whether costs are significantly higher when activities occur between separate organisations rather than within them, but whether ?contracts can be designed and implemented in such a way that the benefits do exceed the costs?.

In conclusion, it is interesting to note the direction in which outsourcing is heading in the future, and what effect this will have on the organisation. Domberger (1998) believes there is a significant relationship between how a contract is implemented, and the benefits that can be gained from it. He goes on to say that a contracting organisation has the opportunity of gaining sustainable productivity improvements.

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Some topics in this essay:
Michael Corbett, Greer Youngblood, Systems Corbett, Ultimately Domberger, Jennifer Laabs, Johnson Controls, Fairfax County, Offsite HR, Research Andersen, Mike Johnson, johnson 1997, keppler 1998, domberger 1998, 1997 keppler 1998, 1997 keppler, johnson 1997 keppler, youngblood 1998, peters greer, laabs 1998, tebbel 1999, greer youngblood 1998, peters greer youngblood, greer youngblood, loss control, human resource management,