Information Technology Outsourcing

Outsourcing is a rapidly growing industry and System Development discipline for many companies in the United States, Europe and Asia due to reduced costs, strategic objectives and to provide greater efficiency. Essentially outsourcing is a methodology to get work completed at reduced costs in another country when it could not be accomplished in the host companies local area. Despite its many advantages, outsourcing does not come without risks and requires effective management to reap any benefits or returns. On a global scale outsourcing is tightening the connections between various markets and companies. Those “connections” do not come without a cost to first world countries and local IT workforces due to employment opportunities and extra revenue is being spent elsewhere. Resulting in jobs could be cut in favor of outsourcing, salaries decreased and employment shrinking.

The major steps to the outsourcing information technology methodology are:

1.Define the objectives:

2.Outsource for the Right Reasons :

3.Use a Methodical Approach To Business Activities:

4.Consider Determining Factors Such as Shareholders:

5.Have the Right People Involved:

6.Understand the Outsourcing Partners and Their Goals:

7.Understand that Outsourcing Is Not the Solution For Everything:

8.Choose the Right Business Relationship:

9.Having a Solid Contract

10.Use a Performance and Penalization System For Vendors:

11.Have a System that Company Performance Can Be Benchmarked and Compared to Competition:

12.Manage Human Resource and Communication Issues

13.What Establishes a End Product If a Project Is Involved.

Perceptions On Outsourcing:

Since outsourcings inception to the IT world, its use has become more common over recent decades due to major corporations having to downsize and restructure to face new economic and competition challenges. For small businesses and other corporations it can lead to new possibilities and opportunities due to new world-class capabilities and location of strategic resources. However, adoption of outsourcing for smaller companies that are not Fortune 500 do not have the revenue to support initial overhead. Hence if looking for employment in a unstable industry then gear toward employment in smaller organizations or start your own business.

Advantages:

-Cheaper or lower cost alternative to services in countries main place of business of origin.

-Provides income and revenue to other developing countries.

-Provides flexibility in the companies workforce and previously “temp” positions in other countries are becoming full time positions.

-Provides a reason for 3rd world countries to become more educated and place more emphasis on IT careers.

Disadvantages

-Temporarily, the nature of IT work careers are changing in a unpredictable and dramatic fashion. Jobs may be located offshore, which can be a reward or a disadvantage depending on one's values and interests.

-It salaries may decrease in North America and the Europe.

-Employment opportunities may suffer due to the outsourcing of contracts.

-Job stability will remain uncertain until the outsourcing System Development model has matured.

Conclusion:

Conclusively, IT workers are already noticing outsourcings impacts on the economy today, but what about future impacts? This writer's opinion is that until outsourcing becomes a bigger concern it will reign supremely. Thus what has happened in history previously, though not in the IT world, the rise of the unions shall prevail again. Companies and governmental legislature will have a problem on their hands when and if this system development methodology takes off full thrust. Again, outsourcing does have benefits to developing a system: It is cheaper, can be efficient, benefits other economies and can allow companies to remain competitive. The pronounced disadvantages are disadvantages to those who are in the more developed countries such as the US and the respective economy. Ultimately, who wouldn't fear the loss of income or employment in their home country, but outsourcing has a place and definitely is not the answer to all problems.

Resources:

http://compnetworking.about.com/cs/careersjobs/a/career_outsourc.htm

http://www.businessforum.com/outsourcing1.html

http://www.businessforum.com/outsourcing2.html