Outsourcing: from customer service to hi-tech, millions of U.S. jobs shift to overseas. What does this mean to business or IS professionals? What’s the benefits, challenges for IS management?

Running Head : Outsourcing

Outsourcing

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Outsourcing : from customer service to hi-tech , millions of U .S . jobs shift to overseas . What does this mean to business or IS professionals What 's the benefits , challenges for IS management

Introduction

The term `outsourcing ' is not a new one and the practice dates back to as early as the 1980 's . The corporate sector has been using outsourcing of non-core organizational and technical operations and functions to mainly the third world countries in to effectively utilize the

worldwide labor , capital , technology and resources . The basic theme is to lower the production costs and to readdress or preserve energy directed at the competencies of a particular industry . However , where the idea seems extraordinarily lucrative to both , the direct buyer (outsourcing firms ) and the direct seller (in-sourcing individuals /firms , it provides a focal point in the shifting of economic activities for the work forces of different countries . The outsourcing of operations from the developed to the developing countries has led the social scientist to believe that this : creates a gap in the demand and supply of the workforce in the developed countries , leads to a reduction in the quality of services and jeopardizes information security (Wikipedia 2006 ) With regards to the situation in the United States , a white released by the office of the US Senator Lieberman in 2004 states

The United States has enjoyed unparalleled technological leadership for decades . Our capacity for innovation has continued to create jobs and raise living standards despite the ongoing migration of manufacturing to foreign nations in the past decade . However , a new potentially more dangerous migration is upon us . The rising trend of outsourcing high technology manufacturing and high-end services jobs overseas presents a new and fundamentally different phenomenon . This new trend is far bigger and more complicated than the current debate suggests . Key components of our innovation infrastructure such as knowledge and capital have become highly mobile . If our engineering design , and research and development (R D ) capabilities continue to follow the manufacturing and services facilities going abroad , our competitiveness will be weakened , putting our economic prosperity and national security at risk

The revolutionary development of IT and its related fields in the last decade has given rise to this daunting concern for the big nations of the world . The United States , the biggest democracy of the world , has been hit the hardest by the crisis (Koehler Hagigh . The impact of this phenomenon has been so massive on the United States ' economy that this issue was raised even by the Democratic presidential candidate John Kerry during his 2004 US presidential elections ' campaign . His criticism revolved around two basic principles that the outsourcing firms were not only depriving the US workforce of work but were also depriving the government of its due share of taxes by outsourcing in the tax havens (Wikipedia 2006 ) The country thus needs immediate reforms in its national policies with regards to its economic structure so as to...