Global Outsourcing A listing of the major decisions that firms have to make, and how firms decide whether or not they should engage in global outsourcing, has been provided in this critical essay. The comparison of major host countries where the companies of the United States (US) have been outsourcing their Information Technology (IT) products and services, and the risks associated with a few of these countries, are also highlighted. Finally, a summary has been provided on what firms should do in order to achieve excellence in global outsourcing.
The Decision of Global Outsourcing
There are generally two major reasons behind an organization’s IT outsourcing decision. The first reason is the popular trend that organizations should focus more …show more content…
The first division consists of four countries, Brazil, Russia, India, and China (BRIC), which are also known as Tier 1 locations in IT outsourcing. These countries are definitely the leaders in providing the Information Technology Outsourcing (ITO) and Business Process Outsourcing (BPO) services. Apart from these BRIC locations, there are about 120 active IT outsourcing host countries in the world, and they all fall under the second division of non-BRIC locations (Oshri, Kotlarsky, Rottman, & Willcocks, 2009). The BRIC locations are popular outsourcing destinations because they provide various benefits, for example, plethora of IT resources, providing a variety of IT services, in addition to their increasing expertise as IT service providers. The non-BRIC countries are also trying to establish themselves in the market, by providing more specialized IT services in focused areas (Oshri et al., …show more content…
The commitment, help, and support of the top management to the global outsourcing are the foremost requirements. The leadership team of the organization can show their support by various means, like creating a dedicated top level executive to handle the global outsourcing, providing funding to define an efficient global outsourcing process, allocating enough budgets to support outsourcing teams and locations, and also by promoting the culture of global outsourcing within all departments of the organization (Trent & Monczka, 2005).
Another major requirement for the organization is to create a well-defined global outsourcing process and define necessary generic policies to make it available at crucial juncture. The availability of global IT resources is also a major factor, which has the capability to completely dislodge a world leading organization in global outsourcing. The quality and compatibility of a global IT infrastructure are also vital factors of success in an outsourcing relationship between two organizations (Trent & Monczka,
The Decision of Global Outsourcing
There are generally two major reasons behind an organization’s IT outsourcing decision. The first reason is the popular trend that organizations should focus more …show more content…
The first division consists of four countries, Brazil, Russia, India, and China (BRIC), which are also known as Tier 1 locations in IT outsourcing. These countries are definitely the leaders in providing the Information Technology Outsourcing (ITO) and Business Process Outsourcing (BPO) services. Apart from these BRIC locations, there are about 120 active IT outsourcing host countries in the world, and they all fall under the second division of non-BRIC locations (Oshri, Kotlarsky, Rottman, & Willcocks, 2009). The BRIC locations are popular outsourcing destinations because they provide various benefits, for example, plethora of IT resources, providing a variety of IT services, in addition to their increasing expertise as IT service providers. The non-BRIC countries are also trying to establish themselves in the market, by providing more specialized IT services in focused areas (Oshri et al., …show more content…
The commitment, help, and support of the top management to the global outsourcing are the foremost requirements. The leadership team of the organization can show their support by various means, like creating a dedicated top level executive to handle the global outsourcing, providing funding to define an efficient global outsourcing process, allocating enough budgets to support outsourcing teams and locations, and also by promoting the culture of global outsourcing within all departments of the organization (Trent & Monczka, 2005).
Another major requirement for the organization is to create a well-defined global outsourcing process and define necessary generic policies to make it available at crucial juncture. The availability of global IT resources is also a major factor, which has the capability to completely dislodge a world leading organization in global outsourcing. The quality and compatibility of a global IT infrastructure are also vital factors of success in an outsourcing relationship between two organizations (Trent & Monczka,