In today's highly competitive global economy, many companies are making the decision to outsource their Information Technology in order to lower costs and move towards a better corporate efficiency. Offshore outsourcing is proving to be a very lucrative and efficient way of managing a company's profits - however at what costs? This paper will focus on the advantages and disadvantages to offshore outsourcing and the impact such decisions have on the American economy and will show that the cost savings gained from the outsourcing of IT to other countries are marginal as compared to the long-term damage this trend will have on the national economy.
Executive Summary :
Outsourcing, and its sister strategy of off-shoring, are by-products of globalization and the U.S. market has been deeply impacted by globalization. The U.S. economy has been one of the global economy's hardest hit by some of the side-effects of globalization: outsourcing and off-shoring. Outsourcing or the contracting out of functions previously handled in-house, and off-shoring, which is the use of overseas firms to provide a product or service previously handled nationally, both contribute to shrinkage of jobs and manufacturing (Globalization; Offshore Outsourcing -Wikipedia).
Introduction History Advantages of Offshore Outsourcing
1) Flexibility: Off load work: You can create capacity for higher margin work in internal sources. This of course creates flexibility in the company ensuring the optimum utilization of the available resources within the company. MachroTech offers you an offshore outsourcing model which combines the best of its onshore and Offshore Software Outsourcing resources, to provide you with the flexibility to operate your business flawlessly.
2) Cost: Generally, outsourced services cost you a fraction of US (30-50%) costs with equal quality. Your competitors are outsourcing operations offshore to have the...