Outsourincing is fine in those functions which are of repetitive & transactional in nature, like payroll, handling employee insurance, recruitment, etc & lot of admin works like security, housekeeping, canteen, transport, etc. We cant have permament employees in such activities.
In todays competitive bsuiness landscape, it is better to concentrate on the core strength rather than spreading yourself thinly in all the activities. Outsourcing adds tremendous value & bring in lot of cost & process efficiencies.
For eg. Apple does not even have a factory of its own; but millions of us use its iphones, ipads, etc. which are of very high quality, being manufactured in China by Foxconn.