Uday Apte
Information systems and corporate executives have recently become interested in outsourcing, the selective turning over of certain functions of information systems (IS) and processing services to a subcontractor. Management views outsourcing as an important option for leveraging resources, containing costs, and focusing on strategic and value-added services. Several countries have pools of well-trained IS professionals and clerical staff whose salary expectations are significantly less than those of their US counterparts. Global outsourcing has become a small but rapidly growing sector of the overall outsourcing market. Advantages of global outsourcing include: 1. significant cost savings and capital market gains, 2. faster cycle time, 3. help in developing and operating global information systems, and 4. access to foreign markets and a skilled labor pool. Drawbacks include: 1. problems with communication and coordination, 2. lack of control of quality and timetable, 3. the potential for violation of intellectual property rights, and 4. unclear attitudes toward transborder data flows and IS services.