How information technology professionals keep from being outsourced or offshored

ABSTRACT This paper introduces the concept of the "vendible line" partitioning jobs in a company into those that are likely to be lost to outsourcing (onshore or offshore) and those that are not likely to be lost. Using this concept, we identify the critical professional skills IT graduates must have to maximize their ability to stay above the vendible line and be immune to such job loss. We then suggest changes to the proposed accreditation standard for IT being synthesized by SIGITE. Suggested changes include the addition of communication, management, and security courses

Offshoring (a.k.a. Offshore Outsourcing) and Job Insecurity Among U.S. Workers

CRS_May_2005_Offshoring.pdf: 2514 downloads, before Oct. 1, 2020

IT Offshoring and India: Some Implications

There has been a large spurt in the offshore outsourcing of Information Technology (IT) recently. India has been a major recipient of such work. There have been loud protests against the "loss" of jobs in the US as work was shifted to India. The large inflow of IT related work has also had major impact on the Indian economy. There are implications on the foreign policy level as well. While the economic implications are well known, we try to see a little of the foreign policy implications in this paper

Offshoring in the service sector : economic impact and policy issues

The United States continues to run an international trade surplus in services, but business stories frequently appear about service-sector jobs moving offshore. Many Americans are particularly concerned about the loss of skilled, well-paid jobs in such fields as computer programming and accounting. These jobs seemed relatively secure at a time when many manufacturing jobs were being lost to import competition. Similarly, telephone call centers, once viewed as an economic development opportunity in some areas, increasingly are moving to low-wage countries, such as India and the Philippines. Reflecting this growing concern, some members of Congress and state legislators have focused attention on the offshoring of service jobs and production, even introducing legislation to limit the outsourcing of jobs to other countries. Offshoring raises many questions for policymakers and the general public. For example, which service jobs will be affected most by import competition? What are the most likely effects of service-sector offshoring on U.S. output, employment, and, most important, our standard of living? Is offshoring really a problem that requires restrictive government actions, or are other kinds of policies more appropriate to give Americans the highest possible living standard? ; Garner examines the economic effects of offshoring and possible policy responses. He finds that although the offshoring of service jobs hurts some workers, offshoring should not permanently lower U.S. employment or production. ; Moreover, the average living standard can benefit over the long run if the nation adopts policies to retrain displaced workers and move them into expanding industries.Service industries

Explaining Variations in Client Extra Costs between Software Projects Offshored to India

Gaining economic benefits from substantially lower labor costs has been reported as a major reason for offshoring labor-intensive information systems (IS) services to low-wage countries; however, if wage differences are so high, why is there such a high level of variation in the economic success between offshored IS projects? This study argues that offshore outsourcing involves a number of extra costs for the client organization that account for the economic failure of offshore projects. The objective is to disaggregate these extra costs into its constituent parts and to explain why they differ between offshored software projects. The focus is set on software development and maintenance projects that are offshored to Indian vendors. A theoretical framework is developed a priori based on transaction cost economics (TCE) and the knowledge-based view of the firm, complemented by factors that acknowledge the specific offshore context. The framework is empirically explored using a multiple case study design including six offshored software projects in a large German Financial Service institution. The results of our analysis indicate that the client incurs post contractual extra costs for four types of activities: (1) requirements specification and design, (2) knowledge transfer, (3) control, and (4) coordination. In projects that require a high level of client-specific knowledge about idiosyncratic business processes and software systems, these extra costs were found to be substantially higher than in projects were more general knowledge was needed. Notably, these costs most often arose independently from the threat of opportunistic behavior, challenging the predominant TCE logic of market failure. Rather, the client extra costs were particularly high in client-specific projects because the effort for managing the consequences of the knowledge asymmetries between client and vendor were particularly high in these projects. Prior experiences of the vendor with related client projects were found to reduce the level of extra costs but could not fully offset the increase in extra costs in highly client-specific projects. Moreover, cultural and geographic distance between client and vendor as well as personnel turnover were found to increase client extra costs. Slight evidence was found, however, that the cost increasing impact of these factors was also leveraged in projects with a high level of required client-specific knowledge (moderator effect)

Outsourcing and Offshoring: Pushing the European Model Over the Hill, Rather Than Off the Cliff!

Offshoring and offshore outsourcing is increasingly affecting the EU-15, both in the manufacturing and services sectors. While no official statistics exist for the scope of the phenomenon, industry experts and press surveys point to a relatively limited extent of perhaps up to 2 percent of the workforce as affected. Offshoring and offshore outsourcing, similar to other trade, creates both domestic winners and losers. The EU-15 countries have the potential to become net beneficiaries from offshoring and offshore outsourcing, if they go ahead and implement the EU Lisbon Agenda with respect to labor market reforms and worker-skill upgrading. Furthermore, EU governments should take steps to promote the mobility of the workforce by increasingly linking social benefits to the willingness to move for work, thereby combating their archipelago of high unemployment enclaves, and to reform EU regional aid by shifting it from infrastructure spending to human capital investment.Offshoring, Outsourcing, Multinational Companies, European Union, Public Regulation, Labor Markets, Regional Aid

Developing a case for a more granular examination in the selection of information technology job roles most suitable for outsourcing and offshore placement

This study reviewed shortcomings present in the process of selecting the scope of offshore outsourcing vendor usage. While extensive financial cost information is available to companies considering this alternative, there is little mentioned of the quality of service performance experienced by the internal work teams that act as the primary consumers of these contracted services. Additionally, it is common practice to contract offshore outsourcing on a project or departmental level without granular examination of suitability at the job role level. This study surveyed a representative sample (n = 30) of IT professionals, and addressed two related research questions regarding internal value return. The first questioned whether a satisfactory level of overall job performance is returned by holistically-outsourced IT services to offshore vendors and results were inconclusive. The second examined if differences were present between work teams responsible for various IT functions, indicating a need for more granular consideration and found significant differences between work teams\u27 needs. As to the first research question, results were calculated from the aggregate mean of each departmental review with which the respondent had direct experience. Overall job performance satisfaction was measured using the t-test methodology as minimally sub-par, with insufficient significance to reject the possibility of sampling error, t (22) = 2.57, p \u3e .05. As to the second research question, departmental satisfaction ratings in 10 factors relevant to service delivery were analyzed for variation in order to determine if significant valuation differences were present. Significant variation present in satisfaction levels between teams are representative of variation in factor importance by department. Three discrete departments -- Application Development, Server Operations, & Solutions and Architecture were examined. An analysis of variance showed that the effect of performance factor was significant F (9, 27) = 304.434, p \u3c 1 that the effect of work team was significant at F (3, 27) = 43.190, p \u3c 1. As both performance factor and work team variations were significant above the confidence level (95%) chosen as the threshold, the null hypothesis that there was no variation in factor delivery efficacy was rejected. The results of the second research question of whether a more detailed and granular examination would reveal differences in factor importance -- or the difference in emphasis on one factor over another, a statistically significant finding that such differences are present was found. Significant differences in value perception present between individual work teams and the collective totals indicated that each work team was unique in their expectations -- and valuation -- of services provided.In order, therefore, to provide optimal value, a more granular examination of each position or team to be outsourced should be conducted in order to reserve those positions that do not perform well for in-house performance, and only outsource those positions likely to do well to an offshore vendor. As each company requires its own unique mix of IT management needs appropriate their situation, each IT work team was found to have a level of unique need as well. These needs define work team satisfaction levels with services provided. Additionally, companies that avoid single factor decision-making with regard to offshore outsourced vendor use may see more optimal results. For the same reasons outlined above, the service delivery performance seen by internal work teams reflect the quality of work performed by the vendor. If such value degrades below satisfactory levels, it is possible to erode the savings realized by cost incentives to a negative return

Finance And Accounting Outsourcing: Three Studies Related To The Ethical And Economic Dimensions Of Accounting Outsourcing

This dissertation evaluates the economic and ethical considerations underlying the outsourcing of professional services such as finance and accounting. The dissertation is comprised of three separate, but related studies. The first study explores the adequacy of the disclosure rules recommended in the revised ethics rulings regarding disclosure of outsourcing relationships and the resulting ethical and economic repercussions for both, the AICPA members and their clients. The second study analyzes the disclosure rules recommended in the AICPA ethics rulings regarding disclosure of outsourcing relationships from an ethical standpoint. The third study adopts the perspective of the third party service provider. The third study analyzes the factors that provide a competitive advantage to leading service providers in accounting outsourcing markets in India. Taken together, these studies address issues that have not been addressed previously in accounting literature and will advance our understanding of a fast-growing phenomenon, the outsourcing of accounting services. Finance and accounting outsourcing may strongly influence the choice of future organizational form and structure thus making it important to develop an early understanding of this industry

Offshoring of healthcare services: the case of US-India trade in medical transcription services

Purpose – The issue of offshore outsourcing of healthcare services is a critical but little-examined problem in healthcare research. The purpose of this study is to contribute to filling this void. Design/methodology/approach – A library-based study was carried out of the development of the Indian medical transcription offshoring industry. Findings – Cost-saving potential and the degree of outsourceability are higher for medical transcription compared with most services. Offshoring experience, typically in a low-value BPO, helps to enhance productivity and international linkages required for the success of medical transcription. Research limitations/implications – An important area of future research concerns comparing India's factor endowments in medical transcription outsourcing with other services. Further research is also needed to examine how India differs from its regional competitors in terms of factors endowments associated with these services. Another extension would be to investigate the drivers of offshoring of higher value services such as radiological readings. Practical implications – ICT infrastructures needed for outsourcing require much less investment compared with leading capital-intensive industries. The development patterns of the Indian medical and offshoring industries indicate that India may attract higher skilled medical functions in the future. The Indian offshoring industry is shifting its focus from BPO to knowledge process outsourcing (KPO). Developing countries need to shift to greater automation and greater levels of skill training to retain and reinforce their comparative advantages. Originality/value – This paper's greatest value stems from the fact that it examines the drivers of a new but rapidly growing healthcare industry

IT OFFSHORING: History, Prospects and Challenges

Offshore provision of IS/IT related services has been growing rapidly in recent years and seems firmly set to continue. This trend is fueled by the many advantages of offshore service procurement; however, there are dangers in this practice. Furthermore, offshoring requires adaptation of the IS function and IS management. This, in turn suggests the need for modifications of IS curricula in order to prepare graduates for the new environment. The advantages of offshoring are those of outsourcing in general – cost saving and allowing the organization to focus on its core activities. The main dangers include loss of possibly-important business skills and reliance on remote suppliers who face risks that are unfamiliar to the client firm. The loss of jobs due to offshoring also introduces political considerations. Offshore IS activities are generally the responsibility of an organization’s CIO. This management responsibility requires awareness of cultural and legal differences and of risks associated with offshoring and outsourcing in general. Offshoring has an effect on job opportunities for graduates of information systems programs. The number of some jobs will shrink, but new positions with new responsibilities are likely to emerge. Training of students in the U.S. and other countries in the developed world to function in an environment of offshored operations will introduce new IS roles and skills and require the adaptations of IS curricula