Wait a second!
More handpicked essays just for you.
More handpicked essays just for you.
Advantages and disadvantages of global outsourcing
Future effects of outsourcing
Advantages and disadvantages of global outsourcing
Don’t take our word for it - see why 10 million students trust us with their essay needs.
Recommended: Advantages and disadvantages of global outsourcing
The Outsourcing Dilemma
CIS Strategic Planning
Introduction
To outsource or not to outsource, that is the question. It is indeed a question that a CIO, CEO, or IT manager is likely to encounter. It is not a simple question, nor is the answer simple, and there is not a one size fits all solution. As with any decision, it is good to face it with facts and without prejudice. This work shall discuss factors that help determine the answer, risks, benefits, cost analysis, and implications to the business.
Prevalence of outsourcing
How prevalent is outsourcing of IT function? Is it true that outsourcing in US companies primarily sends work to foreign countries? According to a Culpepper Compensation and Benefit Survey of 68 science and technology companies, 81 percent of companies surveyed outsource some IT function, while none of the companies did everything in-house and only 5 percent outsourced all IT function (Culpepper, 2007). The following table from the survey results shows the amount of domestic and foreign outsourcing (Culpepper).
This survey clearly indicates that outsourcing is prevalent, with prevalence to outsource to domestic service providers. The Gartner Group estimates that outsourcing will be a 50 billion dollar industry by the end of 2007 (Singh, 2006).
Outsourcing options
There are a variety of different outsourcing options available. Among these are software development, software support, hardware support, complete provision of an application and database environment, provision of server functionality only, provision of specific application capability, provision of business continuity functions, and provision of data backup and recovery functions. To further define outsourcing of software dev...
... middle of paper ...
...rcing as a means of automating a business.
References
Atkinson, Nigel (2005). Software Development Project Outsourcing. NeoWorks, Retrieved July 2, 2007, from http://www.neoworks.com/articles/outsourcing/Software%20outsourcing%20project%20optimisation.pdf
Culpepper, (2007). Compensation and Benefits Surveys. Retrieved July 2, 2007, from Culpepper Web site: http://www.culpepper.com/eBulletin/2007/AprilTrends.asp
external iT. Retrieved July 2, 2007, Web site: http://www.externalit.com/pricing.asp
Forbes, (2006). The Six Most Common Outsourcing Errors. Retrieved July 2, 2007, from Forbes Web site: http://www.forbes.com/work/2004/05/19/cx_jw_outsourceslide.html?thisSpeed=15000
Singh, Anil (2006). Managing the Risks When Outsourcing Offshore. Hanu Software, Retrieved July 2, 2007, from http://www.hanusoftware.com/html/brochure/Outsourcingwhitepaper.zip
Outsourcing simply means acquiring services from an external organization instead of using internal resources (Butler, 2000). By using outsourced resources, organizations can gain a competitive advantage by utilizing contingent staff to accomplish strategic goals without incurring the fixed overhead. By focusing on the leading edge and highly specialized skill sets, outsourcing providers can often offer higher quality services, or at a lower price than the client organization. Typical reasons for outsourcing go beyond simple contingent staffing. Outsourcing providers are able to maintain economies of scale with regard to specialization (...
Mankiw and Swagel (2006) argue outsourcing is not as large a phenomenon as the media describes. Their research indicates outsourcing accounts for very little of job loss in the United States, nor has it made a distinct contribution to the slow rebound of the labor market. They go on to propose that increased overseas employment has actually contributed to higher employment in parent United States companies. They reported that while 30,000 jobs were lost per month in 2004, two million job changes per month were happening as well. They reference the Bureau of Labor Statistics when they report that in 2015 there are expected to be 3.4 million jobs outsourced, but 160 million jobs gained here in the United States. They also claim that there is a rise in net US income by 12-14 cents per dollar of outso...
“5 Facts About Overseas Outsourcing.” Center for American Progress, Center for American Progress, 9 July 2012,
In many cases outsourcing has proven to be beneficial for businesses. It can help a business’s management by allowing executives to focus on the core structure of the firm rather than every specific element. Production, manufacturing, or additional servic...
Outsourcing emerged on the financial arena during the 1980s and has since then been spreading. Outsourcing production was furthered with the process of globalization which provided a new component leading to the strengthening of resources, skill and labor specializations across the world. The process of outsourcing is using the skill and abilities of a third-party to accommodate society on the foundation of labor. As stated earlier, it was during the 1980s that the process kicked off mainly due to the efforts of corporations when they began to hire labor forces across the world. Even though outsourcing has come out from its developing stages, there are still following effects on the US economy.
There are many benefits to outsourcing, many reasons that company has to outsource some of its business. According to Robin Gareiss, “The No. 1 reason companies turn to outsourcers is to save money--64% say that’s the main goal of their outsourcing contracts” (3). Companies are able to save money because they outsource to another country, and the third party that is in the outsourcing contract, runs the business in that country and is able to pay wages in accordance with that country’s laws, which for the most part there are none. The business usually outsources to a developing nation, and as a result can pay much, much lower wages than if it were to stay within the US. This cost-saving idea has become a much strong reason for outsourcing since the economy has been in a recession, a...
Outsourcing is when a company or business decides to contract part of their services that they do not do well to an outside company. There is two types of outsourcing offshoring and nearshoring. Offshoring is where a company outsources abroad and, nearshoring is outsourcing within the home country. The reasons that a company decides to outsource varies from company to company but, the most common ones are cost reduction, increasing globalization, growth , tax incentives, government support and access to new markets. However there are some key challenges that come with offshoring and those key challenges are quality and labor retention. ( Bacon, 2007 p 38-39). Asian outsourcing began as early as the 1960’s (Espana 2013 p 3). Some people argue that offshoring is good for the economy even though it’s a well know fact that offshoring has a negative effect on the economy, there is wage differences and the unemployment rate increase.
Kesavan, R., Mascarenhas, O. A., & Bernacchi, M. D. (2013). Outsourcing Services to India: A Review and New Evidences. International Management Review, 36-44.
Taylor, Timothy. “In Defense of Outsourcing.” CATO Journal. Vol. 25.2. (Spring 2005): 367-377. EBSCOhost. Web. 14 Mar. 2014.
by Donald M. Fisk Bureau of Labor Statistics This article was originally printed in the Fall 2001 issue of Compensation and Working Conditions.
Outsourcing has been around for many years. In this paper, I will discuss some of the history of outsourcing, the good things about outsourcing, and the bad things about outsourcing. Outsourcing is important because many companies rely on it in order to get many different products and services to their facility on time and in good shape. Outsourcing is a huge part of the business industry today. Any business can be affected by outsourcing.
Globalization has had a major impact on the way business is conducted. Companies are increasingly turning to offshore software development outlets for design management. Anywhere from one-half to two-thirds of all Fortune 500 companies are already outsourcing to India and the amount of work done there for U.S. companies is expected to more than double this year according to Forrester Research. This paper will take a look at some of the arguments for and against outsourcing IT development to India. Most importantly this paper will take a look at ethical standpoints taken on outsourcing. But first, we'll take a look at the history of outsourcing to India.
Outsourcing is a technique for companies to reassign specific responsibilities to external entities. There are several motivations for outsourcing including organizational, improvement, cost, and revenue advantages (Ghodeswar & Vaidyanathan, 2008).
Han, K., & Mithas, S. (2013). Information technology outsourcing and non-it operating costs: an empirical investigation. MIS Quarterly, 37(1), 315-331.Retrieved December 3, 2013 from EBSCOdatabase http://search.ebscohost.com/login.aspx?direct=true&db=bth&AN=85634454&site=eds-live},
...t.” (Bremner, 2008) As companies continue to look for ways to cut costs and improve efficiencies the decision to outsource or keep projects within the company are becoming more important. It’s essential to understand the eight steps of the SDLC model and evaluate the risks and rewards of outsourcing application development.