Outsourcing And Its Effects On Business.

3073 words - 12 pages

EXECUTIVE SUMMARYThe subject of this paper is to determine whether outsourcing should be used as an effective tool in business. Outsourcing is known as the practice of turning over responsibility of some or all of organizations information systems to a foreign firm in order to stay competitive. Outsourcing is not new to the business world, as it dominated the manufacturing sector the past couple of decades. By the 1990's, there has been a major shift from outsourcing blue collar jobs to white collar jobs. Popular destinations for include India and China where mostly white collar jobs such as call center agents, data entry, processing forms etc are outsourced. Companies nowadays are look even more to outsource high-end jobs from the IT sector. There are various advantages and disadvantages. Advantages include lower costs, better quality, downsizing to focus on the core competencies, highly motivated workforce, and Information System performance problems. Disadvantages include loss of jobs and its effects, hidden costs that are often not calculated, security and confidentiality issues, cultural barriers, and lack of control over the supplier. Outsourcing is mainly used to save on costs; however there has been a lot of backlash against companies in the developed world because of the lack of jobs in the IT sector. Companies need to effectively research for to be successful in an outsourcing relationship because outsourcing failures are very costly and are difficult to reverse. Outsourcing is a now a popular strategy for many organizations as the worldwide market for computing services are projected to grow yearly. In the future, new outsourcing destinations such as Eastern Europe are expected to pop up. It is essential to carefully weigh both the advantages and disadvantages before heading into a outsourcing relationship with another party.RESEARCH QUESTIONWith the increasing need to remain competitive, should companies outsource in order to remain efficient?INTRODUCTIONWhy do something yourself when someone else can do it better?(John Berry) With computer systems and there implementations getting more complex with every day that passes , the tender of IT responsibilities to external parties is becoming more and more attractive to the IT Managers of large organizations. The common name for this type of operation is 'Outsourcing'. The opening discussion will focus on the explanation of the Outsourcing. This will include the history of outsourcing and how Outsourcing works. The main section of the paper will focus on the advantages and the disadvantages of Outsourcing as well as how it is implemented in today's competitive business world. It will also include examples of both successful and unsuccessful companies when implementing Outsourcing. Finally, I will look at what the future of outsourcing might look like, and its impact on companies. The purpose of this paper is to analyze and figure out whether Outsourcing should be used.WHAT IS...

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