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"the primary premise behind almost all out-sourcing is a cost reduction for the company"
Perhaps, but in my almost 20 years of experience in the field it has also shown to be an almost sure road to failure. Out-sourcing invariably costs more than it cost you in the past. Not only because you usually saw only a part of the total cost. But also because your counterpart knows that. After all he is in it for the profit.

Big question : 'What are you going to do if you don't like the service delivery'?
Don't out-source if you can't in-source it again!