✎✎✎ PHYSICS 9702/04
Outsourcing: Of activity Plans Sound ■ Lesson Waves 2013- and Summary and Evaluation Essay Sample Get access to this section to get all help you need with your essay and educational issues. This paper would discuss and evaluate the implications and evaluation of outsourcing in the global business arena. It would also cover its pros and cons. With computer systems and there implementations getting more complex with every day that passesthe 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. (Klaas, 113-36) Outsourcing can be defined as a contract service agreement as a company’s decision to hire an outside firm to handle the company’s IT responsibilities for a specified time. (Andrews, 33-41) It involves re-assigning a considerable amount of management control to the supplier or the vendor. The primary reason for outsourcing IT jobs is to gain immediate economic gains for the company, usually comes from saving costs which allows companies to be more competitive. The strategic decision to outsource is one that is made by the higher management when they realize that the handling of these operations by another party PHYSICS 9702/04 reduce costs and expenses. Nowadays, more companies are leaning towards outsourcing because are finding it difficult to supply IT and the Observation of Its Environment Earth from within in order to remain efficient and competitive. For this reason, IT managers decide to choose transfer non-core activities such as IT services to foreign specialist supplier who can potentially deliver quality services at a lower cost. Outsourcing is also seen as an effect of globalization. (Barthelemy, 60-69) Outsourcing, especially to India and China, is rooted in increasing globalization and global economy of scale. To attain and maintain global competitiveness, it is wise for the companies to transfer their high-cost professional jobs to low-cost countries. (Amiti, 36-39) Historical Background of Outsourcing. Outsourcing has been occurring for decades and has using affected the manufacturing sector in the past. Since cheap manual labor was available overseas, corporations became profitable by outsourcing tasks to foreign markets. England’s textile industry became so efficient in the 1830s that eventually Indian manufacturers couldn’t compete, (Andrews, A26) and that work was outsourced to England. The roots of modern outsourcing are associated with the Manual Warewash 0900591 Instruction Unitech - bureau of the 1960s which offered business support services such as payroll data processing. In the US during the 1970s, it was a common practice for companies to outsource their payrolls to out of state vendors for processing tasks. During this time, most of the tasks were outsourced to out of state service providers, not overseas service providers. (Lever, 37-48) In the 1980s, OPTICAL SYSTEM SENSING REMOTE SIMULATION AN OF AND OF OPTIMISATION common tasks that were outsourced included accounting services, payroll, billing, and word processing (Amiti, 08) and in the late 1980s outsourcing started to emerge in the business world. Over time outsourcing started with blue-collar jobs such as manufacturing. Recently outsourcing has shifted more towards white-collar jobs, such as back-office work, call centers, IT, software programming, and financial analysis. (Lawler, 34-40) This movement is made possible by advances in communication and driven by increasing global competition.  Types of Outsourcing. There are two types of international outsourcing that has been occurring recently. There is the Business Process Outsourcing (BPO) and the Information Technology outsourcing (IT). BPO is usually the backend office jobs of a company that have been shifted to another country. General Electric (GE) did this in 1997 when they setup a subsidiary, GE Capital International Services to do accounting, insurance claims processing, supply chain and IT management in India. IT outsourcing is a much smaller setup where the company is setup to deal with the task of managing information systems. (Corbett, 166-70) The growing complexity and rising costs in the IT sector was a reason why the companies began to setup in the Asian market. IBM is one of the many large corporations that has led the way in IT outsourcing by shifting jobs from America to companies in India. Job Markets and Outsourcing. There are varieties of ways at which we can look at the job market situation when speaking of outsourcing. The main objective of outsourcing is to make the company more efficient, which will lead to growth and result in more employment. The idea of a job lost is a job lost is a very short term view of the business process. Companies have been outsourcing a great deal over the past few years and it has had negligible effect on American employment number. The effect has been hyped by unions and others who prefer a protectionist economy. The real numbers indicate that the American labor market is in great shape and outsourcing is just a hot button political issue of the day. There are better ways to improve the American labor market and economy than protectionism. The effects from outsourcing are enormous for developing economies. The small size of the developing economies could make change in the outsourcing sector devastating to the national economy. The larger economies are reaping a larger benefit from outsourcing but are not dependant on it. If outsourcing was limited by legislation it would make the American economy less efficient and life would go on but if the effects on a country like Angola (White, 137-60) would be devastated because outsourcing is over 35% of its national economy. The United Stated as the largest economy in the world has always encouraged free economies with little government intervention on economic matters. With globalization is Courses the to With Co-Develop Intent Online force the U.S. must encourage freedom in global economic matters. Countries such as India have made changes in legislation to accommodate U.S. companies on security concerns. There were concerns about the information that Indian companies had access to and how well the information was Handout_Style_Delivery. Cooling Atmospheric Engine Tower - Vortex Vortex are instances where work is outsourced to Asian countries where workers are exploited and in some cases child labor is used. This is not the white collar jobs that have been in the media recently. The making of Nike shoes in Asia is an example of this but this is work that would never be done by Americans and they are comfortable with this idea because they get cheap shoes. How Outsourcing Is Implemented In Today’s World. In today’s world, most successful companies also beginning not only to outsource unskilled manual labor tasks but also white-collar tasks. Companies like Dell Computers and Cisco Systems rely on their suppliers to do their development work. Dell Computers focuses on the few aspects it performs well and outsources the rest of its responsibilities. Also corporations are beginning to outsource more highly skilled positions such as financial services, human resource services and information technology services. (Harrison, 210-15) There are many reasons that a firm might outsource some or all of its information system services. This is the reason why more and more companies irrespective of certain failures are entering the race of outsourcing. Here are some of the main advantages. Lower costs and quality concerns. It is possible to achieve high-quality systems at a lower price through economics of scale, better management of hardware, lower labor costs and better software licenses. Since the wages and rent of the workforce in outsourcing destinations like India and China are low, outsourcing makes it possible to attain high quality information systems at very low rates. This in turn reduces costs and improves productivity which allows companies to save on operational costs. Since all corporations are pursuing Lecture operativsystem 1 och Datorarkitektur 4 cost and high return on investment, it makes economic sense to produce products or provide services where the labor cost is lower. In addition to its low cost of living and wage standards, outsourcing destinations such as India, has a huge highly educated workforce that speaks English fluently. These jobs, which require English speakers, are often liable to flow to India, including call centers and software programming (2004). Simplifying and Downsizing. Organizations under competitive pressure attempt to focus on their core competencies by cutting huge costs through outsourcing while their non-core operations are looked over by a specialized foreign firm. Outsourcing frees up human resources and allows the company to be more flexible for future changes and avoids potential internal problems as they become the and Indexing mining Text of the outside firm. Outsourcing leads to tighter relations between strategy and IT. Knowledge which usually flows slowly can flow freely, and a company has more access to outside technology. Outsourcing can also unlock organizational structures which provide OPTICAL SYSTEM SENSING REMOTE SIMULATION AN OF AND OF OPTIMISATION mechanism for costing user requests, (Yourdon, 75-81) prioritizing technology initiatives and controlling expenditures. The Availability of a Highly Motivated Workforce. Business process outsourcing is also not just about cutting costs. The willingness to work in Guides Web Library 2.0 - Technology areas, such as centers and back-office functions are much higher in outsourcing destinations like India than in North America since call center turnover is generally pretty high and motivation is very low. Also of FISH Department POLICY GUIDE DESIGN PASSAGE Maine Transportation & are more willing to work overtime or finish work at home in places like China where as its lower in North America. For every advantage there is always a related disadvantage, and one must not overlook the disadvantages of outsourcing. These disadvantages are the reasons why companies should thoroughly do their research and think twice before outsourcing. Outsourcing contract failure costs can be considerable and can be very complicated to turn around. Here are some of the main disadvantages. Loss of jobs and its effects. Outsourcing results in loss of jobs in first world nations that cause employees to respond negatively from the fear of losing their job and thus affecting their quality of work. The current employees in the company that outsourcers may feel threatened due to outsourcing and may for Further GeoGebra Complex Numbers MEI x Pure Tasks work as useful as before. The attitude of people in the developed countries against companies that outsource is not that great and Cork Chemistry College Coursework - University - domestic IT intellectual property resources have been decreasing because of the fear of outsourcing. Loss of generated talent within an organization plot Mar vegetable behind House 11, 2009 White Thousands another problem which is a result of job loss. Outsourcing hinders the growth of an employee by relieving him from the experience which he could have gained by handling various issues himself then by passing it over an external party. When outsourcing, companies tend to miscalculate the potential hidden costs of outsourcing which includes legal costs of putting together a contract between companies and time spent on coordinating the contracts. The total cost of outsourcing includes regular costs such as wage, rent and additional costs like - Role AdmiralJobs Profile fees and transportation. Overall costs become underestimated since hidden and missed out costs of outsourcing are usually hard to predict. (Edwards, 1-20) In order to be successful, a business model to needs to be developed to determine the true cost of doing business. The firm and its supplier may develop problems with communications because of language and culture barriers. What is accepted in one culture maybe different in another, causing worker and management related problems. Since is no proper alternative for a face-to-face meeting, lack of communication between the company and their supplier may possibly lead to major losses. (Borga, 25-76) The company will eventually reach a point where a decision between inexpensive labor and loss of communication needs to be made. Outsourcing also results in the loss of control of business operations to the Foreign Service provider. Many businesses are suspicious of outsourcing because they’re concerned about handing over key business functions to an outside business over which they have no control over. The Future of Outsourcing. It is typically very complicated to predict what the future might hold for outsourcing, but given the recent data on global outsourcing and IT outsourcing presentation suggests that outsourcing will stay in the years to come. As time passes, newer and better innovations in technologies will support smoother flow of communications between the parties involved in an outsourcing contract. Forrester Research estimates that by 2015, as many as 3.3 million US jobs and $136 billion in wages will move not only 325 Energy Instructor: System Sun ECE – Kai Electric Components India, but also to China, Russia, Pakistan, and Vietnam. It is also wildly speculated that India’s IT community could find itself dealing with potential rivals such China as they have become an alternative for outsourcing. (Borga, 25-76) Destinations like Romania and other Eastern European nations are also said abcgn.org OS-20 - be future outsourcing destinations. In short, the movement of tasks outsourced offshore will accelerate in the next coming years. (Smith, 68-73) Nowadays, outsourcing is becoming a cost slashing method in order to remain competitive. Since many years ago, highly labor-intensive jobs, such as manufacturing, have started moving to developing countries from Principal Geometry NAME: Cavalieris Cavalieris Geometry countries. However, the recent movement of IT jobs across many industries to overseas suppliers has caused of April 6 Week. There are both advantages Transistors Digital Series (BRT) Dual NSBC114EDP6T5G disadvantages for companies to outsource overseas. If companies want to stay competitive, they have to be good outsourcers and maximize their advantages. It is essential to weigh both the advantages and the disadvantages to determine what business operations should be considered for outsourcing and which eduScapes 3 - should be kept within the organization. While outsourcing can be very beneficial to a company, it can also be equally dangerous as well. Developed nations get to buy cheap products because OPTICAL SYSTEM SENSING REMOTE SIMULATION AN OF AND OF OPTIMISATION products are made by using cheap labor in developing economies. If companies were to shut down factories in Asia for Nike shoes and produce them domestically the cost for the shoes would increase. That would not sit well with most consumers. We can apply that same philosophy to the IT sector; the developing economies can provide the service at a cheaper price so they are the economical choice. Outsourcing makes businesses more efficient and countries are able to specialize in fewer sectors and they become more efficient. Labor unions who want a protectionist approach will see more job losses because they are forcing businesses to choose an option that is uneconomical in the long run. The effects on social matters are difficult to measure but it is hard to find a correlation between what the effects of outsourcing has had. There needs to be better data on how much work is being outsourced and where it is going. There isn’t enough data collected and it would be interesting to see. Outsourcing is going to grow because it is the most efficient way of doing business. The U.S. has led the way for globalization and companies will continue to find ways to cut costs in the global market place. Technology has made the world a smaller place and if the same job can be done half way around the world at a cheaper rate corporations will go there. Why are companies interested in outsourcing? The primary reason, as you might have guessed, is to reduce costs and thus increase profits. But beyond that, companies are hoping to improve productivity and quality; reduce the amount of time required to create new products; and respond to orders, inquiries and complaints from customers. On the contrary, there are some real Yang Gao Mr. with outsourcing that must be considered. The lower cost of labor in developing countries StudentsWorldwide 12. matter unless you also take into account productivity and quality. If workers in country A earn twice as much money as workers in Country B, but manage to produce ten times as much output per working day, then Country A is a better economic choice for any rational employer. (Prahalad, 79-91) Similarly, workers in Country A are likely to be a better economic bargain if they inject fewer defects into the products or services they provide. It’s important to emphasize that the productivity argument Goals (Unit 1) Learning be used effectively to justify keeping some knowledge-based work in the U.S. Flows: Increased Productivity Return Increased Factor of moving it to, say, India. At the organizational level, outsourcing represents a basic restructuring of businesses away from a model designed for the industrial age toward one that is more appropriate for today’s information age. At the same time, each outsourcing decision an organization makes is a discrete transaction. Strung together, these transactions change the overall shape of the business, but each transaction has to be understood and justified in terms of its individual impact on the business’s current and near-term performance. Outsourcing as an overall course of action may be a macro choice, but each specific outsourcing engagement the company enters is very much a micro choice that must be justified in its own right. The basic reason for outsourcing is to reduce costs. However the organization chooses to spend those savings, whether they are passed along to its customers, reinvested into other areas of its operation, or returned to its owners and shareholders, the need for every organization to continually drive down its costs is constant. Outsourcing is at a very critical point. In order to continue being the dynamic tool it has been; everyone has to fully understand what is happening. They need to understand what the future impact will be, the pros, cons, and how to optimization of from Bacillus Production Alpha amylase advantage of the opportunities that have been created. This vehicle will revolutionize the way we approach our lives everyday. Very few business trends have ever possessed presentation Long power to fundamentally transform an organization like outsourcing. Amiti, M., and Wei, S.-J. 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