Theoretical Research on outsourcing work

The most relevant research conducted is that done by LOMA, which explores the pros and cons of outsourcing and off shoring. The focus of the research report is on information technology (IT) outsourcing work and offshoring to IT service companies in the Unites States and India. Sources for the report include SEC filings, Internet sites, press reports, and government research. The topics in the report include: a) Explanation of Outsourcing, b) Explanation of Offshoring, c) Process of Selecting Providers, d) Reasons Why Outsourcing and Offshoring Are Rising, e) Evidence of Impact of outsourcing work.

However, it must be stated here that we found a lack of theoretical research on outsourcing. The knowledge base of the industry does not focus on theoretical research but on financial data and global economic and political trends. What we have observed is that the IT industry is looking at outsourcing as an economic phenomenon and is not focusing on research the way it has for the field of software, microprocessors, the Internet etc.

Why is outsourcing an important issue? Referring to our problem statement, we would like to stress that the problem is significant not only because of its impact on IT outsourcing industry but also because of its impact on the global economy as whole. We know that outsourcing is a $400 billion a year industry and IT outsourcing is a vital part of the industry. A slump in IT outsourcing would mean a loss for the global economy.

Since the problems facing IT outsourcing (such as political pressure in the USA and lack of infrastructure in the host developing countries) can seriously slow down the growth of IT outsourcing, the problem facing this industry is significant.

When we began looking at the debate surrounding outsourcing, we came across DuPont, which has outsourced its project of creating online database of fabrics to China. The report published in Outsourcing Asia's website said that by outsourcing to China the company was able to create a 24/7 operation and complete the project before schedule. The report also pointed out why the company had selected China as its destination and also talks about China's future as outsourcing destination. (Rosenthal, 2005, p.6)

In conclusion, we would like to state that nothing should be judged in a void. If we judge outsourcing work by itself we would not be able to say whether it is good for society or not, but if we view outsourcing from the perspective of the global economy, increasing globalization, rising cost of production in USA, and lower costs in developing countries, we can see that outsourcing has a positive side too. Although fewer than 20% of the total American software companies outsource their jobs, in general offshore outsourcing ("offshoring") is seen as something bad for America. We hope that with this study we would be able to present a balanced picture of outsourcing.

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