Most global information system organizations outsource some portion of their work. Outsourcing and moving operations offshore have become controversial and political. As the leader of your organization, how would you handle the financial and political aspects of a decision to outsource?
This is a difficult question due to the exact reasons stated. As more and more companies move certain functions overseas, it has become a political nightmare for many larger companies. Company A discovers that it can produce the same quality products in country X because the cost of resources is much less in that country. Company A therefore moves that part of the operations, and ends up with lower operating expenses and a higher net profit. The problem is that a certain number of employees likely lost their jobs from a domestic standpoint, if Company A was not able to move those employees to a different department. Also, if the company had considerable operations here, ...
This solution discusses financial and political aspects of outsourcing decisions from management's viewpoint. The controversies, advantages, and disadvantages that are inherent in outsourcing decisions are thoroughly discussed.