It Offshoring Case Study

Specifically, companies are transferring these services overseas as in the case of call and help center services or companies are ordering manufacturing supplies from overseas at a much cheaper price than they could obtain them inside the U.S. Outsourcing is a term that is often used interchangeably with off shoring (Bhagwati, Panagariya, & Srinivasan, 2004).

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

(Pearlson,2001). Cost is the most important factor when the enterprise make a decision of insourcing or outsourcing. If the company produce the products or service on its own, there are costs more than producing, which can include investments of researching, training, and equipment.The investment of insourcing can be a lot more than the outsourcing because of economies of scale.Outsourcing providers can gain significant savings from economies of scale, which client companies usually can’t get on its own(Pearlson,2001). This benefit could be magnified in IT outsourcing.In the case of Project Harmony, as a food company, Campbell soup was a lack of sufficient scale within their own IS departments and IT technical expertise, so the saving between outsourcing and insourcing was significant.To conclude, cost reducing is the first of core benefits of outsourcing due to economies of

One of the biggest impacts of globalization has been to IT (Information Technology) and BPO (Business Process Outsourcing) sector. These two sectors have progressed at never before pace. Key reasons for this is easy and cheap availibilty of skilled workforce with

Outsourcing is the lifeblood of IT. The prevailing theory is that outsourcing saves companies money and enables them to engage a broader pool of IT skills and talent than they could in-house.

In 2004, Global Information Systems, Inc. began to put into motion the consideration of offshoring 3,000 jobs from here in the U.S to company locations in China, India and Brazil. These were highly compensated job positions. About half of GIS is separated into a division known as Global Services Divisions. A considerable portion of GSD’s business came from customers outsourcing their business process needs. GSD began to seek ways to cut costs and improve performance by “offshoring” certain activities in order to present the most attractive value proposition to potential customers.

In light of recent growth of domestic and foreign countries outsourcing and off shoring over seas, companies been taken advantage of the cheap labor cost for outsourcing and off shoring manufacturing. Competitive business investing in domestic and foreign manufacturing have affects every part of the business industries from design, software development, finances and logistic management, i.e., customer and sales. Nevertheless, outsourcing been praised by businesses for outcomes of cost-effectiveness, efficient, productive and strategic, but damned as malicious, because of companies’ greediness, detrimental, and brutal in the public eyes.

· Choose the right location: The type of work being outsourced will influence the location. India has gained a reputation for software development. Between 2003 and 2004 it has seen over a 30% growth in software and IT service exports, and by the year ending in March, 2004, Indian companies have earned $12.5 billion in technology exports. But India is not the only source of reliable but inexpensive labor. Countries such as China, the Philippines, Romania, Argentina, and even Ghana and Ireland are all centers for offshore operations of various

According to Corbett, trace back to the early 1990s, outsourcing came into practice for the first time. It was a time when severe depression covered around the U.S. and even those most competitive of its businesses suffered significantly. “Companies used outsourcing then to help streamline their operations and to regain their competitive strength. The result was an unprecedented period of economic growth during the latter half of the 1990s. as we enter the mid-2000s, today’s challenges may be even more pressing than those of a decade ago.” (Corbett, 15) It is the general result rather than a snapshot combined by a few specific evidences. This short revision objectively indicates that offshore outsourcing is not that threatening as proponent claimed. Organizations has benefited from this practice. And that is the reason offshore outsourcing continued and developed. History is a giant that people can stand on its shoulder. In the background of Globalization, information technology plays an important role. In the past, offshore outsourcing has contributed to the growth and development in the manufacture industry, as a sub category of offshore outsourcing, IT projects offshore outsourcing can also contribute a lot to the growth and development in the IT

Office Supply Incorporated (OSI) is a company in crisis, with challenges in its cost structure and poor IT performance. Outsourcing to Technology Infrastructure Solutions (TIS) is an opportunity to both reduce costs and complexity for the firm, but first must consider whether outsourcing is a good strategic fit for OSI. 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. There are various advantages and disadvantages. Advantages include lower costs, better quality, and downsizing to focus on the

The American Outsourcing Case is a compilation of factual information for the purpose of provoking debates. The authors present both the pros and cons of outsourcing, and avoid inserting their personal bias. The case clearly defines outsourcing and then focuses on outlining its existence in China, Mexico, and India. The evolution and U.S. involvement in the Maquiladoras of Mexico is described first. The implementation of NAFTA and the creation of Maquiladoras were major catalysts in the growth of free trade between the U.S. and Mexico. China, in an attempt to attract foreign investors, created Special Economic Areas, which designated geographic zones that were enabled to operate under their own laws. With great tax benefits

Because of the important relationship between insourcing/outsourcing and competitiveness, organizations must consider many variables when considering an insourcing/outsourcing decision. This may include a detailed examination of a firm’s competency and costs, along with quality, delivery, technology, responsiveness, and continuous improvement requirements. Because of

Offshoring is the practice of relocating business processes to lower cost locations outside the country of origin. This is not a new practice for companies in the United States. Moving business processes to another country to take advantages of lower operating costs and cheap labor seems like a great idea. However, the dilemma for a company is whether the benefits of offshoring outweigh the risks. This dissertation will begin by briefly reviewing the history of offshoring. Next, it will examine the various advantages and disadvantages associated with offshoring. Thirdly, it will explore the growing trends of backshoring and nearshoring in situations where

Here researchers examined the selected countries like India, china, Brazil and Russia. He mainly found that there is continuous rise in outsourcing revenue for global sourcing, and he found that the BPO will overtake ITO within five years. The latest trend is multi-sourcing. They also found that India is still holding the clear lead as the preferred destination for outsourced services both BPO and IPO. The dollar value of the Chinese industry itself is twice that of India’s (Carmel et al, 2008). The captive centers are wholly owned by subsidiaries located in offshore location that that perform work for parent companies. The captive center use the strategies to change the way of offshore assets are utilized. One of the strategy used by captive center is pursuing a hybrid strategy here the captive outsource units of work to a local service provider. These captive centers still work for the parent companies but they outsource their work or insource the work. By doing these the captive centers can focus on the value adding services and their core services by doing these reduction in the cost can be done. There is also risk associated with these type strategy like non completion of contract, reduction in quality of service or goods

Global economy has become a hot topic for international forums. It believed that the value of IT off shore consists of better process management of operational skillfulness. So, they should put effort in developing technology platforms to make business more efficient.