Essay On Outsourcing

889 Words4 Pages
The main objective of any individual or group going into business is to make profit. Their profit is the difference between the cost of providing the good or service and the actual cost to the consumer. As more companies venture into the same line of business the competition for customers gets intense thus bringing into play the law of supply and demand. Oversupply of a good or service pushes the price consumer has to pay down. These forces have pushed managers and business strategists into the search for ways to increase the bottom line while reducing cost of good or service delivery. Using information technology has been a way to maintain business competitive advantage for many of the biggest companies. Typical uses of information technology in business are the automation of payroll, human resource management, key business processes etc. The desire by managers and business owners to increase the bottom line has further pushed them to explore several strategies to further reduce the cost contribution of IT to the total cost of goods and services they provide. Among such strategies include off-shoring, offshore outsourcing, near-shoring and co-shoring all aimed at reducing cost of the information technology used by a company. This paper aims to explore all the above listed strategies and specify the most cost effective measure associated with information security risks to adapt. Introduction Outsourcing is the hiring out of work by a company to a separate existing unit or company with more specialization that can do them more efficiently and less expensively. This helps the company outsourcing work increase profit while shedding work. Over the years businesses have adopted the strategy ... ... middle of paper ... ...e options for outsourcing of work, co-shoring is arguably the one that has the lowest information security risks. It pulls advantages from off-shoring and near-shoring into one business model while reducing disadvantages associated with adopting any of them in isolation. For information security concerns, a company can decide to manage jobs that contain sensitive information near-shore instead of moving it to their offshore partners. This helps companies have sufficient control over their data because of the proximity. Furthermore, costs are further reduced especially if the critical jobs that require constant travel are done by near-shore partners and not so critical jobs done off-shore. This contrasts with full off-shoring which may have greater labor cost reduction but greater travel expenses that can neutralize the effect of reduced labor cost.

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