Business – 4.3 Capacity utilisation and outsourcing – Outsourcing | e-Consult
4.3 Capacity utilisation and outsourcing – Outsourcing (1 questions)
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| Item | Before Outsourcing (£) | After Outsourcing (£) |
| Staff salaries | 120,000 | 0 |
| Software licences | 30,000 | 15,000 |
| Training & development | 20,000 | 5,000 |
| Total annual cost | 170,000 | 20,000 |
Impact on service quality: The provider offers 24/7 support and specialised expertise, which can improve response times. However, the distance between the provider and Company X may lead to communication delays and a reduced understanding of internal processes.
Impact on managerial control: Outsourcing transfers day‑to‑day decision‑making to the external firm, limiting Company X’s ability to enforce its own service standards. Regular performance reviews and clear service‑level agreements are essential to maintain control.