INTERNATIONAL OUTSOURCING

International Outsourcing

Abstract

China is a prominent outsourcing destination in Asia. International labour outsourcing, especially in the IT sector, has grown rapidly in recent years. This paper defines outsourcing through an extensive review of the literature and discusses the opportunities and challenges for outsourcing to China. Seeking strategic 'fit' among the disparate elements that influence the firm's outsourcing decision is recommended. The authors explore the IT and business landscapes in China and propose strategies for outsourcing success there.

Table of Contents

Abstract2

Introduction4

Body: Discussion and Analysis4

Conclusions and Recommendations10

International Outsourcing

Introduction

One form of business organization in today's economy began to outsourcing - the practice that helps companies solve problems in the functioning and development of a market economy by reducing costs, increasing adaptability to environmental conditions, to improve the quality of products and services that reduce risk. The use of outsourcing was the rapid swing in the world during the last decade, largely due to the rapid development of information technology.

International Outsourcing means a transfer to an outside contractor to certain business functions or parts of the business process of the company. Outsourcing can improve the efficiency of certain functions in the field of information technology, procurement and supply, service, finance, staffing, and even production. Company customer can outsource secondary functions using to focus on those features which are peculiar to it is, in its specificity. Unlike outsourcing, outsourcing - a strategy for managing the company, not just kind of partnership, it involves a restructuring of the internal corporate processes and external relations of the company.

Body: Discussion and Analysis

While any of the several business functions of any firm may be outsourced, outsourcing information technology (IT) or information services (IS) has become quite common. IT/IS outsourcing consists of turning over all or part of an organization's IT/IS functions to external or unrelated service providers (Chen et al 2002). There are a number of different approaches to IT/IS outsourcing. Four modes of IT outsourcing have been identified: back office (facilitating payroll, accounting, finance, tax preparation, auditing, document processing, transcriptions, and data storage), front office (expanding marketing and customer service through call centres, email and websites), operations departments (using procurement, inventory, and supply chain management), and special projects (introducing software transitions) (Burr 2002).

As one of the world's prime outsourcing destinations (DiCarlo 2003), China also is a prime contender for the top spot in international labour outsourcing. Contributing to its attractiveness to outsourcers are the technical specializations among China IT workers in hardware services, localization, and application development (Leung 2003). China's culture offers some insights into its relative attractiveness as an outsourcing location. The applications of Hofstede's (1991) research are illustrative, as well as helpful, for suggesting the broad outlines of some of the aspects of China's complex culture and its values which are salient for outsourcers. While broad generalizations can be dangerous, they may also offer useful insights and factors for awareness and further consideration.

The Chinese value a long-term orientation, yielding priority for continuing and stable harmonious relations within highly structured organizations; concern for the future, doggedness ...