IT Outsourcing—Domestic vs. Global
The distinction between domestic and international collaborations has blurred. A number of companies, depending on their organizational size, outsource their IT work to domestic or international companies. For example, a multibillion dollar company may outsource an IT project instead of developing it in-house. The reason could be a high profit margin due to a lower cost for the outsourced solution. Mid-market firms, which are companies with the prospects of high growth within just a few years from creation, are often faced with the question of whether to outsource or not.
This week’s Discussion is designed to help you understand the reasons mid-market firms may select domestic or international vendors for outsourcing IT projects.
• What considerations lead mid-market firms to domestic, rather than global, IT outsourcing? Explain.
• What features of global IT outsourcing should be beneficial to a mid-market firm? Explain.
• Do you think the concerns of a mid-market firm about global outsourcing are reasonable? If yes, how can a mid-market firm change to make global outsourcing practical? If no, how could you, as a potential global vendor, overcome the firm’s fears? Justify your viewpoint using appropriate examples.