Prompt/Paper topic (Directions on Rubric) = How can Outsourcing IT affect the economy:

Profit levels, ability to reinvest, overall businesses (costs, productivity, technology, etc.)
What do you need researched? = Outsourcing
Citation Style: = APA
Additional information? = Basically research on how outsourcing IT jobs can affect firms and an
economy. Also, how this affects the economy in the US.

Sources:

1. How Outsourcing Affects The U.S. Economy!

a. Proponents insist that outsourcing will save money for companies, will open up
opportunities and will lead to more Americans holding jobs at a higher level. They feel
this practice offers substantial gains to the US economy with cheaper imports and
stronger exports.
b. Opponents who are against outsourcing argue that hiring people from foreign countries
effects the US economy in a negative way and strips hundreds to thousands of
Americans of jobs, especially the skilled and semi-skilled workers. They argue that the
loss of competitive advantage to other countries is permanent and the American worker
and economy lose forever.
c. All the points seem valid in their place. It has to be agreed that outsourcing does lead to
loss of jobs in the US, especially those that have minimal qualifications. On the other
hand, the loss of jobs is not only limited to people with minimal skills, but also jobs of
skilled labor that are being outsourced to other countries.
d. Americans who are in poverty and willing to do minimally skilled jobs find it harder to
find jobs, and poverty does nothing for the US economy, other than reduce consumer
spending and tax revenues.
e. There is also data that provides evidence that jobs are lost and lost forever, especially
for those who belong to the low end of the food chain.
f. The middle class American is not far behind as even his job is being outsourced. This
level of outsourcing involves the computer and technology industry.
g. Outsourcing in these areas does not leave enough jobs for the Americans. A jobless
person cannot purchase homes and cannot spend money. When people do not buy,
people that produce things do not make money too.
h. Another harmful effect of outsourcing is loss of income by local, state and federal
governments. There are lesser payroll tax receipts and lesser contributions to Social
Security and Medicare. Then there are the outgoing payments for unemployment
benefits. Sales and other tax revenue suffers too.
i. United States also faces similar problems. By outsourcing, not only skilled labor is lost
but monetary gains too. What must be understood is that service jobs do not pay as
much as manufacturing jobs do nor do they create national wealth. On the other hand,
they absorb wealth. Manufacturing jobs have by far the greatest impact on national
economy, in terms of losing skills and the time taken to retrain such a force. Another
thing is the loss of industrial infrastructure with the closing down of U.S. factories and
then exporting of capital abroad. This money is then not available for U.S. economic
expansion.
j. Service jobs on the other hand do not need so much training and very little capital
investment. U.S. companies derive savings in wages and more importantly in health
benefit payments by outsourcing these jobs. Of course there is no doubt there is loss of
national wealth by sending money abroad to pay their wages and salaries.
k. An argument pro outsourcing can say that short-term job losses brought on by
outsourcing are mitigated in the long run by gains to American workers from
consumption growth and free trade in low-wage countries.
l. Many government agencies outsource a part of their work in order to save millions of
dollars, which helps US economy and helps federal spending. The theory here is that
paying people less for work means that these companies have the ability to produce
things cheaper and will be able to transfer these savings to their consumers back in the
U.S. Cheaper rates means more consumers buying the products. One example is that of
the early 90s, when the price of personal computers dipped because the U.S. chip
manufacturers outsourced this offshore and thus reduced chip prices anywhere
between 10 to 30 percent.
m. U.S. investors, shareholders and American consumers derive the benefits of
outsourcing, although sometimes at the expense of American wage earners.
n. Another supportive argument is that outsourcing jobs to other less developed countries
helps those countries economically and helps increase trade for US products. It also
gives those countries the ability to pay back their debts to the U.S.
o. Experts believe that the greatest saving potential comes from outsourcing simple
assembly work or services. Since there is not much capital involved, except for training
people in other countries and payments for displaced U.S. workers, there is no other
major investment.

APA Citation:
Saleem, H. (2008). How outsourcing affects the u.s. economy!. directory journal.
Retrieved from
http://www.dirjournal.com/business-journal/how-outsourcing-affects-the-us-economy/

2. How Does Outsourcing Affect the U.S. Economy?

a. How outsourcing affects the US economy is a matter of great debate. For those to the
political right, this practice will have an overall positive effect on the US economy, since
it saves money for companies, opens up opportunities for greater entrepreneurship in
the US, and leads to more Americans holding higher level jobs. Critics suggest hiring
foreign workers has an immediate effect on the US economy by stripping many
Americans of jobs they would have performed, particularly by semi-skilled or skilled
laborers. The way that companies are taxed based on outsourcing may decrease a
corporations tax debt and thus decrease federal spending.
b. Both sides on this issue and all those who try to navigate a middle road between the
two sides, have some valid points. It is true that outsourcing has led to job loss in the
US, and has had a detrimental effect on those people who may be only minimally
qualified to work. Its also the case that there are plenty of skilled labor jobs being
outsourced to foreign countries. The loss is not only to people with minimal job skills.
c. A problem for those Americans who are impoverished, and might take minimal skill jobs
is that it is now much harder to get jobs of this type. When President Clinton enacted
the Welfare to Work plan in the 1990s, he was attempting to encourage people to get
back to work so as to reduce government spending in welfare. Unfortunately, with
fewer jobs available for unskilled workers, people may find themselves in exceptional
poverty. Poverty does not benefit the US economy since it reduces consumer spending
and tax revenues.
d. Even in the middle classes, there are plenty of jobs that are now outsourced. This has
been particularly the case in the computer and technology industry. Again, inability to
find work means inability to purchase homes, spend money, and profit companies.
When people dont buy, corporations that produce things dont make money, which can
thus trickle down to fewer jobs available and a greater desire to outsource to make
things more cheaply so they will be more attractive to consumers.
e. Those supporting outsourcing say that lowering expenses of corporations will create
jobs. There are plenty of government agencies that outsource some of their work,
saving them millions of dollars, a direct effect on the US economy and on federal
spending. A common theory contends that being able to pay people lower wages for
work means that companies will be able to produce things with less expense and
transfer this saving to consumers. Lower prices may mean more consumer spending,
and companies will be able to hire more workers in the US because theyre paying less
for workers outside of it.
f. Further, many argue that giving jobs to workers in less developed countries improves
those countries economically and increases trade for US products. It also increases a
countrys ability to pay back debts to the US, and may promote better political
relationships. Companies economically benefit by selling their products in other
countries. This means they can hire more people in the US, lower their prices on
products for US consumers.
g. There is another side to the issue of outsourcing that needs to be addressed. Not all
people in other countries economically benefit from outsourced jobs, and some
companies arent dedicated to providing humane working conditions. Outsourced work
may be performed by children, or in inhumane working conditions. Abuses of foreign
employees might not benefit US trade or political relationships.



APA Citation:

Ellis-Christensen, T. (2012). How does outsourcing affect the u.s. economy?. 2003-2012
Conjecture Corporation. Retrieved from
http://www.wisegeek.com/how-does-outsourcing-affect-the-us-economy.html

3. How Jobs Outsourcing Affects the U.S. Economy (IT).

a. Information technology (IT) outsourcing is when jobs that used to go to American
workers are sent to IT workers in other countries. It also occurs when those workers are
given visas to work for IT companies in the U.S.
b. IT (Information Technology) outsourcing is blamed for reducing jobs for American
workers. Find out how much information technology outsourcing occurs, how IT
outsourcing impacts the economy, and what should be done to reduce IT outsourcing.
c. India and China provide a large pool of expert, proficient IT workers at a low cost.
Furthermore, if a company has already moved its factory overseas, to take advantage of
low labor costs, it will want its technology workers near it manufacturing plant. Often a
company must locate manufacturing and technology jobs overseas if it wants access to
the domestic market. The governments of China and India often require this type of
technology outsourcing for an company to get an inside track to sell its products to that
country's market. Another advantage for India's IT workers is that they already speak
English.
d. U.S. technology workers just can't compete price-wise. An entry-level IT worker earns
$7,000 a year in China and $8,400 in India. IT managers in China only make $22,600
while those in India make $30,800 a year. That's because the cost of living is cheaper in
these countries. However, a U.S. technology company must keep its costs low to
compete in the global marketplace. If it can get trained workers at a lower price, it
makes good business sense to do so.
e. Many experts suggest using federal funds to address the supply side of the problem and
get more U.S. college students graduating in the STEM (Science, Technology,
Engineering & Math) areas. Educating the American workforce will help to decrease
reliance on importing new workers. However, this will only go so far, as U.S. workers still
need higher wages than Indian or Chinese workers.
f. Perhaps the only solution is to do as these emerging market countries do - require they
hire U.S. workers before they sell to the U.S. market. The downside of that is higher
prices for these imported goods. That's exactly what's happened with Japanese cars that
used to be much cheaper before they opened U.S. manufacturing plants.

APA Citation:

Amadeo, K. How information technology outsourcing impacts the economy.
Retrieved from
http://useconomy.about.com/od/suppl1/f/How-It-Outsourcing-Impacts-The-
Economy.htm

4. Outsourcing and Its Impact on Information Technology Workers.

a. Outsourcing has surfaced as a predominant choice for major corporations in America. In
the path of organizational effectiveness businesses are opting to take the trail leading to
overseas. The idea of outsourcing is not an entirely new concept. For years corporations
have struggled to find alternative methods to reduce costs without sacrificing quality.
Outsourcing or off-shoring resulted in massive lay offs in the manufacturing industry.
Workers in the manufacturing trade witnessed their positions slashed by record
numbers thanks to outsourcing.
b. Careers in Information Technology are now suspect to the potential threat of
outsourcing. American workers are making the choices to have promising careers in the
Information Technology field. These workers have prepared by completing the
necessary schooling and getting the right certifications.
c. Offering lower salaries, tax exemptions, and luxurious work centers are some of the
methods foreign countries use to attract American organizations. When an American
organization decides to hire Information Technology workers overseas it has a domino
effect on the economy. When manufacturer workers jobs were outsourced the answer
was to re-educate and learn new skills. However, the average IT worker is already
educated and highly skilled.
d. A career in Information Technology is considered as a sound career choice with above
average income and unlimited possibilities for growth in the United States. A review of
the Information Technology field within the past five years reveals that the threat of
outsourcing has created a substantial amount of instability and guesswork for the future
of careers in Information Technology. Major organizations are downsizing in America
and setting up offices in India, China, and other countries. Workers in the Information
Technology industry are experiencing turbulent times in the United States.
Organizations are turning to outsourcing and off-shoring as a means of finding cheaper
labor to solve Information Technology challenges.
e. In the new millennium working faster is exactly what Information Technology workers
are doing. The climate of the Information Technology industry is similar to a roller
coaster ride. Five years ago IT workers were in huge demand and an IT career was
viewed as a launching pad for success. Yet, now the IT field is going on a rocky plateau.
To be successful workers must buckle up their seatbelts and learn to adapt to
unpredictability, unsteadiness, and increasing new innovations.
f. Dr. Ahlawat describes outsourcing as the process of eliminating work typically done by
in-house personnel and enabling an outside vendor to perform those tasks. End-user
computing, processing of data, wide area networks, development of applications, and
maintenance functions might be included in the turning over of facilities, staff, or
hardware (2006). In its most basic form outsourcing is out-tasking or rather getting
another individual or group of individuals to do a portion of your work.
g. How are Organizations Benefiting from Outsourcing? - President Bush believes that the
technological growth in India is a vehicle for which new jobs are developed for American
businesses. Bush recently toured India and has publicly commented that Americans
should be more optimistic regarding the benefits of outsourcing. The benefits must be
high because the United States spent an astounding $450 billion dollar on outsourcing in
2002 (Devraj, 2004). There is a shared belief that the loss of jobs due to globalization is
small in comparison to the amount of incentives the United States stands to gain from
globalization.
h. Obviously, such a disproportion between the amount of pay for IT workers in India and
the United States creates an appeal for organizations. This appeal sends companies
flocking over to other countries to find IT workers. While in the United States there is a
need for Information Technology workers, the threat of global competition raises a
considerable amount of skepticism around investing in an IT career.
i. However, if American colleges want to better prepare students to become more globally
competitive they must create a global curriculum. A global curriculum gives students the
opportunity to learn about people of other cultures, backgrounds, different economies,
agriculture, and environments (Ahlawat, 2006).
j. Who benefits from outsourcing? Actually, consumers reap the benefits of goods at
lower prices. Textiles, automobiles, electronics, and shoes are all available at lower costs
in the United States thanks to cheaper labor available overseas. Workers who were
outsourced thanks to deindustrialization have had an opportunity to learn new skills and
are now working in other industries. These workers are able to continue to purchase the
goods that are made overseas despite the loss of income they experienced from being
outsourced.
k. Purchasing goods at discount prices loses it's viability when you are unemployed. Are
low cost goods as important to American consumers as stable employment? The
argument is that while consumers are demanding goods at lower prices. Fewer working
Americans can consume as many goods and services due to lack of available work.
l. Warehouses and factories of today are usually run with a 'leaner mentality'. The 'leaner
mentality' involves using fewer employees to make goods. Previously, warehouses were
used to store goods until consumers purchased the goods. Mass production resulted in
the continuous need for more employees.
m. Over the next ten years organizations are eliminating incentives and benefits that help
to secure employees future. The days of retiring with one company are long gone.
Workers today are responsible for creating their own wealth and selling their skills and
knowledge. Recognizing a need or a problem and convincing an organization that you
can satisfy that need or solve that problem is the transformable key that sets the future
worker apart from the employees of the past. Knowledgeable workers are the trend for
the future (Snyder, 2006)
n. Summary and Conclusions.
i. The discovery of highly skilled workers in foreign countries working at lower
wages has propelled organizations to take the idea of the American dream
overseas. Actually, the dream is still in America it's just that you have to be able
to be globally competitive to obtain the dream. Yes, outsourcing has emerged as
the 911 answer for corporations to have the strategic edge. However, few
organizations are weighing the long-term effects outsourcing does to the
American culture and economy.
ii. Information Technology workers are the latest victims of the outsourcing trend.
Alarmingly, after investing thousands of dollars in an Information Technology
education there is always a considerable chance your job may go overseas.
Corporation leaders must realize that there is more at stake than the bottom
line when making decisions to take business overseas.
iii. The impending danger involves ethical implications as well as economical
ramifications. The convenience of technological advancements has conveniently
displaced thousands of American workers.
iv. Perhaps, there is not a single solution to the outsourcing debate. A collaborative
effort must be made to find the best way to create stability in the American job
market. "Right sourcing' 'smart sourcing' and 'open sourcing' are acronyms that
are surfacing within the business world to display the need for organizations to
find in-house personnel to perform those Information Technology tasks (Fowler,
Jeffs 1998).

APA Citation:
Colbert, M. (2007). Outsourcing and it's impact on information technology workers.
Retrieved from
http://voices.yahoo.com/outsourcing-its-impact-information-technology-
517386.html?cat=55

5. Information Technology Outsourcing.

a. As a current Information Technology professional in the U.S., or a student considering a
future career in IT, outsourcing is a business trend you must fully understand. Don't
expect the trend to reverse any time in the forseeable future, but don't feel powerless
to cope with the changes either.
b. IT workers in the U.S. are already witnessing some impacts of IT outsourcing, but the
future impacts will possibly be even greater.
c. Don't Panic - The prospect of job searches or career changes can be quite stressful to
Information Technology workers. IT students may understandably begin to question
their choice of career. However, the more stress and worry a person takes on,
paradoxically the more difficult it becomes to successfully reach their career goals.
d. Don't Wait for The Upturn - So-called experts predicted a sharp upturn in the U.S.
economy and increase in IT jobs for several years, that largely did not happen. Expect
that IT will operate in the current climate with respect to outsourcing for the
foreseeable future.
e. Become a Generalist - Years ago in Information Technology, specialization was king.
Those with the heaviest technical backgrounds and loftiest job titles, like Enterprise
Architects, commanded the highest salaries. Nowadays, a person is much better
positioned if they are skilled in multiple areas of both technology and the business side
of IT. Flexibility is king.
f. Look to Smaller Organizations - Fortune 500 companies will primarily pursue offshoring
ventures but smaller firms less so. Outsourcing creates a substantial amount of
overhead before the gains kick in, and small companies can't afford to pay that price for
the foreseeable future.
g. Start Your Own Business - Uncertain economic times, and occasions of industry change,
are often the best ones for starting a new business, due to lower prices for capital, less
competition, and the natural emergence of big new market opportunities. All it takes is
an entrepreneurial attitude and a few good ideas.

APA Citation:

Mitchell, B. Information technology outsourcing how outsourcing affects your career in
it. Retrieved from
http://compnetworking.about.com/cs/careersjobs/a/career_outsourc.htm

6. How Outsourcing Affects The U.S. Economy.

a. There is statistical evidence that offshore jobs are usually lost forever. Especially to
those at the lower end of the economic food chain. This has recently been an issue in
the US manufacturing sector,where according to Businessweek, U.S. data shows that
moving jobs overseas hasn't hurt the economy... BusinessWeek, on the other hand says
that they are dead wrong!
b. Americans who are in poverty and willing to do minimally skilled jobs find it harder to
find jobs, and poverty does nothing for a country's economy, other than reduce
consumer spending and tax revenues.
c. Supporters insist that outsourcing will save companies a lot of money and will open up
opportunities which will lead to more Americans holding higher level jobs. This practice
they feel, offers substantial gains to the US economy because of cheaper imports and
stronger exports.
d. Those who are against outsourcing argue that hiring people from foreign countries
effects the US economy in a negative way by stripping thousands of American jobs,
especially in the skilled and semi-skilled sector of work. They feel that loosing their
competitive advantage to other countries, will be permanent and the American workers
and economy will have lost forever.
e. According to BusinessWeek, there is a gaping flaw in the way statistics treat offshoring,
with some dire economic and political implications. Top government statisticians now
acknowledge that a problem has come to light and admit, that it could even prove to be
serious.
f. According to BusinessWeek;"the underlying problem is located in an obscure statistic:
the import price data published monthly by the Bureau of Labor Statistics (BLS). Because
of it, many of the cost cuts and product innovations being made overseas by global
companies and foreign suppliers aren't being counted properly.
g. IT (Information Technology) outsourcing is blamed for reducing jobs for American
workers. Find out how much information technology outsourcing occurs, how IT
outsourcing impacts the economy, and what should be done to reduce IT outsourcing?
Information technology (IT) outsourcing is when jobs that used to go to American
workers are sent to IT workers in other countries. It also occurs when those workers are
given visas to work for IT companies in the U.S.

APA Citation:

Hartslief, A. (2011). How outsourcing affects the u.s. economy!. Retrieved from
http://news.wikinut.com/How-Outsourcing-Affects-The-U.S.-Economy!/veepdwj2/

7. The Effects of Outsourcing to the American Workforce.

a. Despite the popularity of outsourcing in business in the United States, there are many
skeptics that believe that it is harmful to the American workforce. The main concern is
that jobs sent overseas reduce the number of jobs available to the American worker.
According to the Bureau of Labor Statistics, the number of manufacturing jobs has been
reduced by more than three million due to work being moved overseas (Whalen, 2005).
b. Opponents of outsourcing feel that the unemployment rate is evidence enough to show
the damaging attributes of sending jobs to other countries. Another concern is that
most workers displaced by the loss of their jobs are forced to take pay cuts in order to
gain reemployment. Statistics from the U.S Labor Department (Whalen, 2004) show that
a third of all workers forced to find new jobs during a company's outsource downsizing
will settle for a 20 percent reduction in pay.
c. Not all people oppose offshoring in the United States. There are many people that
believe that outsourcing does not cause harm to America's workforce. In some cases,
supporters believe that it even benefits it. For example, a study conducted by Mary
Amiti and Shang-Jin Wei (2004) shows that the United States workforce is not at risk
from outsourcing. In their study, they show that while the US is a large exporter of jobs
to international markets, they are also the largest importer of outsourced services from
foreign countries.
d. The American workforce is not the only thing affected by outsourcing. The populations
of local communities are also affected by it. Some communities in the U.S. are formed
around ,and rely on, one or more corporations based there. If companies decide to
outsource and move jobs away from the communities, the workers are then forced to
find new jobs. In some cases, the need to move to another community to find work is
necessary. While some people find this to be a problem, others say that it is not reason
to raise concern. With the study conducted by Amiti and Wei that showed that more
jobs come to the U.S. from other countries than we send abroad, It is important to
examine this issue. Honda, a Japanese car manufacturer, is one large importer of foreign
services. A Honda plant and its subsidiaries in Marysville, Ohio employ over 12,000
employees in that area (Honda, 2007).
e. The government has some influence on outsourcing in the U.S. While this was a huge
issue in the 2004 presidential election, the debate still exists. There are government
officials on both sides of the argument. While some of them support offshoring, and
encourage it in American business, others are making an attempt to prevent it from
happening. Either way, those on both sides of the issue work to ensure that some of the
workers that are displaced by outsourcing are helped in some way. For Example, Trade
Adjustment Assistance is granted to manufacturing workers to provide income benefits,
training and healthcare assistance to those who have lost their jobs (Whalen, 2005).

APA Citation:

Miller, B. (2009). The effects of outsourcing: Does it hurt the american workforce?.
Retrieved from
http://voices.yahoo.com/the-effects-outsourcing-does-hurt-american-4272873.html

8. Information Technology Outsourcing and Its Effects to the Firms.

a. Outsourcing is growing at a rapid rate in the United States, Europe and Asia because
organizations view outsourcing as a way to achieve strategic goals, reduce costs,
improve customer satisfaction and provide other efficiency and effectiveness
improvements. Like any organizational decision, outsourcing is not free of risk and
requires effective management from the outset of the outsourcing evaluation through
the life of the contractual relationship. This article outlines fifteen critical factors for
successful outsourcing.
b. Outsourcing must be done carefully, systematically, and with explicit goals. Companies
that rush into outsourcing without fully understanding what they hope to gain may find
themselves mired in a contractual battle with a chosen vendor or the recipient of
services that worsen rather than improve. Sensible reasons to consider outsourcing
include both strategic and tactical concerns on both a department and organizational
level.
c. Outsourcing is not an excuse to wash management's hands of a poorly managed,
costly, or misunderstood function. Understand the costs of a function and manage it
effectively before evaluating its potential for outsourcing. Otherwise, you are probably
deciding to outsource for the wrong reason, you may be giving the outsourcing vendor
gains you could have reaped, and you may be starting a relationship that is destined to
fail.
d. Organizations should consider (or reconsider) the overall merits of selective outsourcing
every three to four years. Revisiting outsourcing may be particularly relevant under
changing market conditions or when internal, industry, or technology changes have
occurred.
e. Managers who have made the decision to outsource should be able to predict the likely
impact that outsourcing will have on the organization's stakeholders, who include
stockholders, customers, suppliers, and employees. For example, news of a pending
outsourcing arrangement may alert the stock market to perceived organizational
troubles or send a signal that "something is finally being done at Company X" thus
causing the stock to rise. After anticipating the impact of an outsourcing evaluation on
stakeholders, managers should include the revealed issues in the outsourcing plan.
f. The persons who should be involved depend on what is to be outsourced and the
circumstances surrounding the outsourcing decision. An executive sponsor or champion
is desirable, and in cases that involve organizational politics such support is absolutely
critical. For larger outsourcing initiatives, top management must play a role. For smaller
efforts, middle-level managers might do the heavy lifting with the support of higher
managers. The team likely needs a mix of managerial and technical talent. The team
should also include representatives from user areas that will be directly and heavily
impacted by the outsourcing under consideration. User views may be critical for setting
scope and for assessing risks.
g. Vendors that offer various outsourcing services aggressively market and pursue
organizations to adopt outsourcing. Although the information that such vendors provide
is often useful for establishing the types and general prices of services that might be
outsourced, the actual price an organization will pay is set in actual negotiations related
to specific requirements. Managers should take care not to be misled by what other
organizations are paying or what a vendor might casually offer as a possible pricing
scheme. After narrowing potential vendors to a manageable handful, better pricing and
service agreements can often be reached by negotiating with the best-fit two or three
vendors and then striking a final deal based on the best final offer.
h. Outsourcing might be justifiable for a department with high costs that cannot be
reduced or a lack of competency in specific areas. Organizational needs that generate
consideration of outsourcing include the ability to compete globally with global services
or relief from financial pressures achieved through immediate cost savings.
i. When outsourcing threatens to upset the status quo in an organization -- as in instances
of outsourcing motivated by high costs or poor performance-- it may not be possible to
rely on internal sources for accurate estimates of internal costs or internal effectiveness.
Under these circumstances, bring in objective outsiders for the assessment work.

APA Citation:
Klepper, R., & Jones, W. (1999). Outsourcing information technology systems and
services. Brookline, Massachusetts: Prentice Hall.

9. Information Technology Outsourcing.

a. Information technology (IT) is a vital aspect of doing business today. With so many more
consumers taking their business online, information technology outsourcing makes
sense, as IT professionals are in big demand in most industries. In addition, many
functions of IT can be managed more affordably by outsourcing to independent
companies and individuals instead of using in-house providers.
b. Outsourcing information technology processes takes place in many industries due to
several factors. Primarily, this is to control the costs associated with IT processes, some
of which can be expensive to manage by onsite staff, who are limited by resources, time
and equipment. When IT project needs change or budgets are limited, information
technology outsourcing saves money and resources.
c. Another good reason why information technology outsourcing is used by many firms is
because of time factors. Having additional IT support working 24/7 on a project can help
improve the chances of getting it accomplished in a more timely manner. In many cases,
this can dramatically speed up the time needed to complete a project by important
deadlines.
d. Oftentimes, web or software development projects become complex, necessitating the
support of additional IT professionals who specialize in more difficult aspects of
projects. Information technology outsourcing is used by companies that are limited in
being able to handle new or complicated processes. A task may be more efficiently
performed by certified IT professionals who can work around the clock to address the
more difficult aspects of the project, something it would take months to accomplish
with an existing IT team.
e. One of the better reasons for using IT outsourcing is to adapt quickly and affordably to
the demands of clients. If a company is going to compete in the market today, the
company must be able to make changes and improvements quickly in order to retain
consumer loyalty. Customers today demand a fast response, products and services that
address their immediate needs, and affordable solutions to their problems.

APA Citation:

Taylor, T. (2012). Conjecture Corporation. Retrieved from
http://www.wisegeek.com/what-is-information-technology-outsourcing.html

10. IT outsourcing and its benefits to the US economy.

a. Contrary to common perception, information technology outsourcing benefits the US
economy by increasing the number of US jobs, improving real wages for American
workers, and pushing the US economy to perform at a higher level, according to a new
study.
b. "Global sourcing continues to be a net positive for American workers and the US
economy," said Harris N. Miller, president of Information Technology Association of
America, the leading trade association for the IT industry.
c. "By driving down the costs associated with computer software and services and by
opening more overseas markets to US competition, global sourcing sharpens our
country's competitive edge at home and abroad. The result is more American jobs,
higher wages and a faster growing economy overall."
d. Global sourcing contributed $5.1 billion to US exports in 2005 and is expected to grow to
$9.7 billion by 2010. The benefits of free trade clearly provide a boost to the US
economy, Global Insight chief economist Nariman Behravesh said.
e. Using offshore resources creates additional jobs, increases efficiency, reduces costs,
dampens inflation, lowers interest rates, and increases spending. The challenge is to
help transition of displaced workers to other productive activities. The study found that
raising barriers to worldwide sourcing would adversely impact US workers and US firms.
If all global sourcing of software and IT services terminated completely, the impact
would slow the US economy and actually reduce the number of new jobs available to
American workers.

APA Citation:
Ganjoo, M. (2005). It outsourcing benefits us economy. Silicon Valley: Retrieved from
http://www.rediff.com/money/2005/nov/02bpo2.html

11. Outsourcing Information Technology.

a. U.S. industry is being driven to outsource high-tech service and software jobs to cheap
locations overseas, but federal and state governments dare not do so. The issue is a
growing political hot potato as more highly educated and well paid IT workers lose their
jobs.
b. Shifting high-tech service jobs offshore is a trend that is accelerating, says Arup Gupta,
president of TCS America, an IT services firm based in India. "In a very serious,
competitive environment, companies have to concentrate on their core competency
and they want to outsource everything and reduce cost and therefore we are seeing the
trend toward offshore outsourcing increasing," he says.
c. American IT workers should not be paranoid about losing their jobs to cheap offshore
rivals, Harris said in response to a question from Manufacturing & Technology News.
The high-tech industry is simply in an economic slump and when demand accelerates for
products and services, employment will follow thereafter.
d. The Information Technology Association of America is also lobbying at the state level to
defeat legislation that prohibits the "offshore" outsourcing of government IT contracts.
"The reason we dont want to see legislation prohibiting states from sending work
offshore is it hurts our efforts as an association representing American companies to
convince countries around the world to open competition to allow EDS, Oracle,
Accenture, IBM or Microsoft to win contracts," Harris explained. "We cant turn to the
rest of the world and say open your markets and then turn around and say if your
country wants to send companies here were not going to allow that to happen."
e. The main issue at the state level is jobs, and one of the problems states confront today
is the fact that robust growth in productivity "is gained by a tremendous number of
layoffs," said Newstrom. "Its a terrible misnomer because it looks like a productivity
gain, but we dont see it on tax roles or the unemployment rate. Its not going
anywhere. Productivity is not an indicator that we use in the states. Profit per employee
doesnt translate to new jobs....I have a grave concern that there is going to be a
backlash [against offshoring] very quickly."

APA Citation:
(2003). Inside the debate over outsourcing information technology service jobs overseas.
(Vol. 10, p. 19). Retrieved from
http://www.manufacturingnews.com/news/03/1017/art1.html