As organizations start looking for ways to cut costs during the slow economy, but at the same time remain productive, global sourcing offers an attractive solution.
The term, global outsourcing, is used to describe the practice of transferring some aspects of business development to other countries, either near shore or offshore. For IT companies, global sourcing provides the opportunity to send business operations or processes to third-party vendors outside of the country. Global IT outsourcing typically offers lower labor costs, reduced overhead expenses, access to qualified IT personnel, an operation that virtually runs 24 hours a day and increased productivity. These key benefits of global sourcing give IT companies an edge over competition.
It has been estimated by Techs Unite, a website for a high-tech workers union, that 528,478 U.S. jobs have been sent to offshore suppliers since January 1, 2000 through August 2008. As technology continues to progress, it is now easier for companies to manage IT projects transferred to global sourcing vendors.
As a way to boost their economies, many foreign governments have started offering companies incentives relating to global outsourcing. India, China and Malaysia graduate thousands of IT professionals every year from local colleges and universities.
Even though global IT outsourcing can create a competitive advantage, companies looking to outsource should be cautious when choosing a vendor and location.
Benjamin Shao, associate professor of Information Systems at Arizona State University's W.P. Carey School of Business, was quoted in an article as saying, "It (offshore outsourcing) is still a very popular business practice nowadays. But I think U.S. companies now have learned from their own experience or from their competitors' experiences over the last few years. So now they also try to be a little bit more discreet and careful when it comes down to the idea of offshore outsourcing."
Some of the major concerns for IT companies have to do with data security and intellectual property protection. When an organization is searching for an IT vendor, it is important to look into what systems are in place to protect data. Information about data security and intellectual property protection should be available before an IT outsourcing contract is signed. In fact, these issues should be addressed in the global sourcing agreement.
There are some other considerations when it comes to choosing an IT vendor, such as the country's benefits and risks, the expertise and qualifications of the vendor's employees and communication capabilities.
Global sourcing can be a great way to remain competitive in the global environment. As long as an IT company is aware of the risks of global sourcing and how to minimize them, outsourcing can be used as an effective tool in the overall organizational strategy.
Author Resource:-
A&E Consulting is a full service consulting firm that has been successfully helping clients with their global needs. Visit http://www.globalsourceyourit.com or call 661-200-3612 for more information.
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