Essay about Offshoring at Global Information Systems

918 Words Oct 3rd, 2014 4 Pages
Kristen Valla
BBMBA 9111
Case Study 1
Offshoring at Global Information Systems, Inc.
Background/Overview
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.
This case examines the issue of
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Risk/reward It was clear to management in GSD that although these numbers are very compelling and give the company an opportunity to save a vast amount of money, offshoring would still be a very sensitive decision. Historically, the benefits of free trade had been premised on the logic of comparative advantage. Management at GSD wondered whether the concept of comparative advantage was losing its relevance as an argument in favor of free trade. The question was put forth that, if free trade simply transferred jobs, where would the new jobs come from to utilize the skills of highly trained displaced developed world workers who had grown accustomed to high levels of pay? In 2003, a newspaper article commented on a political debate related to offshoring jobs of radiologists from the hospital of Massachusetts General Hospital. It stated, “The hospital would beam images electronically from some scans to India, to be worked on by radiologists there”. As one would expect, US radiologists were up in arms over this. “Who needs to pay us $350,000 a year if they can get a cheap Indian radiologist for $25,000 a year?” (Who’s Reading Your X-Ray, The New York Times. Nov. 16, 2003). This is the exact view that GSD would not like to portray. Their reputation both internally as viewed