Outsourcing IT Essay Example | Topics and Well Written Essays - 750 words

Outsourcing IT - Essay Example The three main outsourcing options are domestic outsourcing, offshore outsourcing, and mixed outsourcing. I feel that the best choice of these three is domestic outsourcing because there are few disadvantages for telecommunication firms. Outsourcing—the New Economic Answer to a Tattered World Economy How can outsourcing be defined? Well, outsourcing is the process of hiring workers outside your business to carry out the various tasks needed for your business (Baxter, 2011). The telecommunications industry is faced with the issue of outsourcing all the time. These types of businesses need to calculate whether it is economically viable to hire home country staff or outsource the work overseas. In order to determine this, we will review some of the advantages and disadvantages to contracting out work that is normally done from within and by company employees. Some of these reasons include reducing overall costs, scalability, ability to focus on critical business needs, and legal tax benefits. Outsourcing enables a company to access global talent at a fraction of what it would cost to hire an employee (â€Å"When is Outsourcing not Outsourcing?† 2004). Because the economy in a shambles, bailouts are running rampant, and the price of gold is going through the roof, many businesses are electing to hold onto their money and not expand the company. Hiring contract workers can be very advantageous because you can help remove legal liability, get the job done faster and cheaper, and fire and or change-out new people/talent at will. There are many different types of outsourcing, but none of them are a fit for all. This paper will discuss different options and will make a business recommendation for CEOs in the telecommunications industry. In general, telecommunication corporations need to reduce overall costs and increase profit margins for shareholders and in an uncertain and confused economy at that. The introduction of Eastman Kodak outsourcing may have c leared-up some of the muddy waters and given business executives some of the incentives they need to take outsourcing to a whole new level (Earl, 1996). As an example, I will use information technology for my outsourcing project because IT outsourcing is a typical make-or-buy decision. Here are some of the positives and negatives of outsourcing shown in the table below: Advantages Disadvantages Flexibility Security Scalability Job displacement Tax incentives Poor customer service Legal liability Culture and language barriers Overall cost reduction Poor quality control Selecting an outsourcing provider is a definite challenge for telecommunication problems. There are many options and none of them will accomplish all your business requirements (â€Å"Offshore Outsourcing Models, 2007). This means that tradeoffs are necessary. Here are three options I have chosen for my research paper: A. 1. Option 1: Domestic outsourcing: This is where a company contracts out work to another company that is located within the same country. A.2. Option 2: Offshore outsourcing: Offshore outsourcing occurs when businesses outsource work or even entire departments to foreign countries. A.3. Option 3: Mixed outsourcing (offshore companies with your country’s business presence): This is a mixture of the previous two options where work is contracted overseas but under the supervision of the local company’s business operations (Quinn and Hilmer, 1994). When making