Share
Explore BrainMass

Outsourcing: impact on business and the bottom line.

Provide information on how web enabled technology has made it easier for companies to outsource some business functions and the positive/negative impacts of this trend on performance from a bottom line perspective.

Solution Preview

There has been a near-panic situation because of the outsourcing of computing positions from the US. However, according to a study published in the New York Times, this fear is largely unfounded [1].

The study, conducted by the Association for Computing Machinery (ACM), has shown that the forecast regarding job losses because of the movement of computing work outside the US is baseless. While only about 2-3 percent of jobs are likely to move overseas, the number of new jobs created far exceeds this figure. In fact, IT hiring is at a higher pitch than during the dotcom boom in the 1990s. Moshe Y Vardi, co-chair of the study group and Rice University computer scientist, believes that there is more competition, but IT jobs are not dwindling in the US.

The AMC study, titled "Globalization and Offshoring of Software", details the various factors operating in this arena, such as the economics of offshoring computing jobs, the logic of offshoring from the national and company perspectives, the globalization of research, the risks and exposures in offshoring, the lessons leaned from offshoring, and the political forces that operate behind offshoring.

Outsourcing leads to global economic growth
The worldwide phenomenon of growth in economic strength is largely a product of outsourcing. The "Strategic Review 2006 - The IT industry in India" has shown that outsourcing contributes the most to the growth engine worldwide, and the growth in India itself is expected to cross $36 billion in annual revenue in 2005-2006. Rediff reports:

Export earnings accounted for 64 per cent of the total ...

$2.19