Administrative fees charged by a prime contractor for passing funds through to subcontractors often range from 25 percent to 35 percent.
The choice between outsourcing or operating a captive facility for call center services, non-voice customer services and back office processing, offers advantages for both approaches. Here we examine the advantages of outsourcing and two principal strategies for outsourcing. In an upcoming article, the advantages of establishing a captive facility will be detailed.
There are two principal strategies being pursued for outsourcing: strategic and market-driven outsourcing. Strategic outsourcing is addressed first because it does not lend itself to the establishment of captive offshore operations as easily as market-driven outsourcing.
