Achieving cost efficiency

The most important reason for outsourcing to be highly cost efficient is because it can help an organization centralize and consolidate key learning functions. And these functions include learning facility administration, class rosters and registrations, LMS integration, and content development and management. These are often called shared services and they tend to be used by multiple units throughout the enterprise.
The disadvantage of decentralization is that it is rife with inefficiencies. Technology purchases are duplicated and staffing becomes redundant. Integration efforts can be lengthier and more costly because of a lack of standardization. When a learning BPO service provider initially gets a company’s business, the typical first response is to centralize as many commonly used functions as possible in order to eliminate duplication of tasks. While this does usually result in immediate cost savings, it does not account for the need for different business processes.