Impacts of Technology on Outsourcing

Impacts of technology on Outsourcing

Outsourcing has become so prevalent in recent years that one can say that we are living in an age of outsourcing. Outsourcing have grown globally on such a scale that many companies and organizations have uprooted their entire workforce and moved them to across nations for various reasons. The global outsourcing market has continued to grow exponentially within in the past decades which would explain why many companies flock to it. According to Chamberland (2003), the global outsourcing market was estimated at 72 billion dollars in 2002, estimated to rise to 100 billion dollars in 2005 and to increase exponentially in the coming years. With such enticing figures, many companies flock to reap from the expanding market.

Chamberland (2003), also points out that according the a top consulting companies, the outsourcing market is only utilizing 10 percent of what can be fully outsourced at 100 percent. Therefore one can say that the market isn’t fully utilized yet and saturated. As companies begin to realize these potentials, the market can be expected to grow even bigger than projected. However companies should be careful to analyze the possible benefits and disadvantages of outsourcing on their companies before investing in it.

In this study, I will discuss some negative and positive relationships of technology and outsourcing. Utilizing peer reviewed articles I will demonstrate the overall impacts of technology on outsourcing. This paper will exemplify why industries choose to outsource, the parties involved in outsourcing, and technology’s role in outsourcing. I will begin by providing a brief overview of outsourcing and other types of outsourcing such as net sourcing, in-sourcing, and shar...

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...ause it enable a low cost workers to perform duties that would normally require a higher paid workers. In these cases, technology makes it possible for companies to reduce labor and production cost and still produce high quality services or products. Lastly, technology can be a disadvantage for companies that do not want to outsource. These companies are left with the options of spending large sum to keep up with the ever changing technological innovation or outsource to company that already posses newer technologies. In this case, the organization may lose its control over product quality, service quality and in house hiring. I believe that with the information presented in this current study, organization should fully analyze how technology impacts their operations, their service output and the goal they wish to achieve before engaging in outsourcing ventures.