ARTICLE REVIEW

Article Review

Article Review

There are many reasons that a firm might outsource some or all of its information system services. Companies today want to make use of the outsourcing advantage in order to progress and stay abreast of the competition. This is the reason why more and more companies irrespective of certain failures are entering the race of outsourcing.

It is possible to achieve high-quality systems at a lower price through economics of scale ? better management of hardware ? lower labor costs and better software licenses. Since the wages and rent of the workforce in outsourcing destinations like India and China are low ? outsourcing makes it possible to attain high quality information systems at very low rates. This in turn reduces costs and improves productivity which allows companies to save on operational costs. In fact most companies can cut their operating costs to half by outsourcing. This allows a company to stay ahead of its competition by providing better service and better customer satisfaction. Since all corporations are pursuing low cost and high return on investment ? it makes economic sense to produce products or provide services where the labor cost is lower. In addition to its low cost of living and wage standards ? outsourcing destinations such as India ? has a huge highly educated workforce that speaks English fluently. These jobs ? which require English speakers ? are often liable to flow to India ? including call centers and software programming.

Organizations under competitive pressure attempt to focus on their core competencies by cutting huge costs through outsourcing while their non-core operations are looked over by a specialized foreign firm. Outsourcing frees up human resources and allows the company to be more flexible for future changes and avoids potential internal problems as they become the responsibility of the ...