Competition And Sustainability For Reducing Production Costs

1467 WordsJan 3, 20166 Pages
Competition and sustainability in the third-party IT contracting industry in the United States are driven by economic factors such as outsourcing, globalization, mergers, and acquisitions (Rose-Anderssen, Baldwin, & Ridgway, 2011). In turn, these factors shape and transform third-party IT contracting companies (Jancikova & Brychta, 2009). IT outsourcing (ITO) is a business solution for reducing production costs (Desar & McGee, 2010). This approach is used frequently in the operation of call centers to provide customer service. For example, in Germany, a labor regulatory framework is used to reduce labor costs in the operation of registered companies (Weinkopf, 2009). Work is outsourced to less developed countries with less-costly…show more content…
Representatives of most IT companies, particularly call centers, use cloud computing software to allow connectivity and sharing of resources in company data centers (Beverakis, Dick, & Cecez-Kecmanovic, 2009). Cloud computing software is an advanced tool used in outsourcing, particularly for communications, because of the capacity to collect and access massive amounts of data. This software is commonly operated in a data center, which allows access to associated data in a variety of ways (Anthes, 2010). Because most call centers operate using cloud computing, third-party IT contracting security is a primary concern (Anthes, 2010; Gatewood, 2009). During the 1980s and 90s, outsourcing organizational activities became the standard for many organizations (Kahai et al., 2011). Outsourcing, as a part of an organization’s overall strategic plan, has been effective in helping achieve organizational goals and objectives (Kahai et al., 2011). Currently, many organizations incorporate outsourcing into the strategic plan, and this trend will probably increase in the future (Heikkila & Heikkila, 2010). Although outsourcing will not solve all of the problems inherent in attempting to achieve competitive advantages and organizational cost-reductions in an organization, the practice is increasingly part of an organization’s overall comprehensive strategy in the business world (Andreff, 2009). While
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