Outsourcing The biggest benefit to outsourcing is the reduced risk for the company. With an in-house data center, all the risk lands on the parent company. In an outsourcing situation, that risk is now transferred to the contracted company. You are paying them to ensure your data is kept safe and maintained in an ethical manner. This ends up saving the parent company money because they no longer have to keep the specialized staff on hand, and they do not have to worry about the large capital expense. The draw back is that you are trusting a third party with secure information. It is important to be thorough when selecting the appropriate outsourcing company. Service Bureau Service Bureau's offer specialized service in a particular area of hardware and/or software. This is beneficial when a company is looking for a specific option. The specialization of this service allows the company to be very focuses and have employees dedicated to that specific task. The down fall is when you need other elements of a different service. That may force a company to contact anther vendor thus generating extra costs