Answer to Question #42539 in Macroeconomics for gursahib

Question #42539
teacher had given one article "technology sector at threshold of new world order" by kevin allison and chris nuttall.
Ques. is this most efficient arrangement possible? would it be more efficient if more firms could have produced vista? would microsoft have spent the money to develop vista if it didn't hold a patent- that is , if once it developed vista (or any of the operating systems it has developed since), anyone could have produced and sold copies of the programme?

Expert's answer
Businesses can gain a number of cost and efficiency benefits by outsourcingparticular functions to a third-party specialist, it has been claimed.

Ewan McKay, marketing manager at Response, explained that contracting in the experts helps achieve a higher level of service than performing the same function in-house.

He noted that almost all organizations outsource some of their operation, including marketing, IT provision, printing and customer relationship management. Mr McKay said outsourcing helps businesses to focus on their core area of business, allowing them to develop key products or services and strategy. "It can improve service quality through experience, efficiency and service level agreement," he stated.

"It can provide your company with operational expertise, demonstrating best practice that would be too difficult or time consuming to develop in-house."

"It can help improve your customer's experiences through enhanced customer insight and allows firms to tap into the latest innovative thinking and developments whilst limiting capital expenditure," Mr McKay added.

Meanwhile, businesses gain scalability when outsourcing, he suggested.

"You can manage service fluctuations through ramping up and ramping down
[services]," Mr McKay said.

"Contractual targets, such as a legally-binding contract with agreed key performance indicators) ensures service delivery is met," he noted.
"There can be shared liability with your outsource partner. Finally, outsourcing can increase your knowledge and provide access to specialists in a particular business area."

The use of cloud computing is one practical example of outsourcing - where businesses use online IT services and applications which are managed and hosted off-site by a specialist vendor. This enables the customer to move from an IT investment model based upon capital expenditure to one based on operational - allowing the firm to pay for IT according to usage, rather than up-front.

Businesses can also see a greater return on investment as they can enjoy all the latest upgrades without further expense.
Their IT investments are less likely to become outmoded or obsolete, because they simply pay for them on a subscription basis through a specialist vendor.

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