Analyse the Importance of Information and Communication Technologies in the Process of International Outsourcing.

In general, the outsourcing is hiring the foreign workers/company to do a particular task, as opposed to hiring domestic workers/company. Besides the outsourcing, the international purchase is an essential activity of companies. In the trend of a booming global economy, a company only focuses on its core value and hire suppliers to supply the necessary product and service. The relationship between companies are complicated and interdependent.

Outsourcing has become an integral part of many organizations today. Outsourcing has its advantages and disadvantages that organizations will have to weigh to decide whether or not outsourcing is the best possible solution to their current problems and business operations. Outsourcing refers to the process of hiring external provider to operate on a business or organization function (Venture Outsource, 2012). In this case, two organizations or businesses enter a contract where there will be an exchange of services and payments. This paper will discuss the possible risks an organization may encounter in outsourcing in relation to the use of an external service

The IT Service industry has expanded rapidly. Many companies worldwide have made the decision to outsource this industry to offshore companies. Worldwide demand has increased growth to 40 to 50 percent on an annual compounded rate basis. Many developing nations like Latin America and Asia have made an attempt to obtain some of the IT offshoring business from countries like the United States because it is seen as not only a source for

Outsourcing to a company in China gives the advantage of having business ties to China’s finical

China is one of our biggest labor competitors. The reason many US companies go to China for outsourcing is again, because of their workforce’s willingness to operate at low costs. Michael Zimmerman describes this as a disparity in worker “tolerance”. Where the low wages found in China are “far lower than U.S.

Outsourcing has become a very common part of business around the world. Outsourcing is when a corporation

According to the Ministry of Industry, data shows that in 2008 China's software and information services outsourcing industry scale reached 156.77 billion yuan, up 41.2%;

one are the days when companies looked at China as a monolithic land of 1 billion potential customers. Companies are now focusing on how to capture small segments of China’s giant market, and none of these segments is as attractive or as full of potential as the country’s rapidly growing—and multifaceted—middle class. As China’s economy continues to grow, more people will migrate to China’s booming metropolises to find better-paying jobs. These working consumers, once among the country’s poorest, will steadily climb

Many developed countries have been outsourcing as a result of which, it has become a common act. Global outsourcing became majorly popular amongst organizations since the introduction of communicational advancements in the late 90s. Now communication ideas and keeping a check on an outsourced office in any third world country is as easy as turning on the light. Sharing of production is not as limited as it seems that organizations now disperse various services and functions worldwide in order to take an advantage in the cost and resources of the market.

By 1984, they were producing more than $1 million worth of rice and a range of side products, including rice wine. Their residential earning was up to about $200 a year. (Prager 52 ) This meant that they could begin replacing their mud-and-straw hats with solid brick houses. Shanghai today is a vast construction site with more than 20,000 projects, with 27,000 companies building bridges, tunnels, flyovers, ring roads, hotels, villas, golf courses and also public housing. This sparked national growth of about 10% a year.( 53 ) The Chinese now are going home

However, the contracting of non-governmental workers allows agencies to adapt to the rapid changes in technology because many times contractors are certified and experienced knowledge workers and have the expertise to deploy the latest technical innovations (Chen and Soliman, 2002). For this reason the outsourcing of technical and complex tasks to contractors have become increasingly popular across both private and public organizations (Slaughter and Ang, 1996). Some of the emerging trends in outsourcing includes domestic verses offshore outsourcing. Domestic outsourcing is a perception of the local jobs in a country which is best for the local economy. It has rural outsourcing which makes rural parts carry out functions in a competitive basis rate as compared to other service providers from other countries. Offshore outsourcing is as a result of its spread to many countries and is brought forth by change in prices. Another trend is security issues whose major concern is the security questions on the sensitiveness of information that is accessed by outsiders of the firm. It has been a key concern and still remains as there have been reports of fraud and theft of assets which is a limiting factor to the growth of outsourcing locally and internationally.

Outsourcing IT services causes organizational risks that services recipients must have pay serious attention to. About a decade ago, very few companies had any experience with the contracting process. Much experienced has been gained outsourcing non-core process such as catering, security, logistics and treasury and archive services. in fact, many companies now have experienced with IT outsourcing itself, since they have contracted out their IT services before sometimes even to several consecutive suppliers.

Outsourcing has become an alternative for many major companies as a way to not only manufacture products in other countries, but also employ and develop jobs in other countries in which reality should be available in the United States. Outsourcing as it may seem beneficial to the companies that employ it, actually harms the economy by decreasing the job market that is present in the United states. Offshore outsourcing has a strong potential to affect a variety of jobs ranging from low paid low and skill jobs to high paid and skill jobs. A princeton economist had predicted that about thirty to forty percent american jobs can be offshored in the next ten to twenty years (Institute, 2015). Specifically, informational technology jobs is field that has been targeted to be outsourced in the past, present, and future. A study from the Center for Urban Economic Development found that U.S. imports of business, professional and technical services increased their outsourcing by seventy seven percent in the years of 1997 and 2002 (Offshoring vs Outsourcing, 2015). With the large number of jobs that could move offshore in the future, there is the potential for an increase in the number of jobs moving to other countries, specifically informational technology jobs. This in return would result in a negatively affecting United States jobs and its economy.

Outsourcing refers to hiring an outside, independent firm to perform a business function that internal employees might otherwise perform. Many organizations outsource jobs to specialized service companies, which frequently operate abroad. The outsourcing trend stands to continue; the latest wave of outsourcing impacts the information technology field. IT outsourcing includes data center operations, desktop and help desk support, software development, e-commerce outsourcing, software applications services, network operations and disaster recovery.2

Over the last five years the percentage of global Information technology (IT) budgets that have been allocated to IT outsourcing has progressively grown to 23% of total budgets as of the close of the latest calendar year. This continual reliance on IT outsourcing is fueled by not only cost, but also the ability to create new software applications faster, reduce time-to-market by attaining external expertise critical to a new projects quicker, and the ability to keep valuable internal resources focused on the most strategically critical projects (Rosebush, Leavell, Maniam, 2012). IT outsourcing, contrary to widespread public opinion, is not about chasing the lowest cost per labor hour around the world to have programming completed or routine maintenance of applications done (Khan, Niazi, Ahmad, 2011). Best practices in IT outsourcing seek to create a competitive advantage through the alliances with outsourcing partners, while at the same time optimizing overall organizational performance (Ren, Ngai, Cho, 2011). As all outsourcing is inherently filled with risk, any due diligence to create an effective IT outsourcing framework must begin with a thorough definition of risk management guidelines and objectives, followed by the prudent definition of risk trade-offs as captured in the contracts and service level agreements (SLAs) (Wan, Wan, Zhang, 2010). All of these factors must be kept in balance with one another for any enterprise to gain the full