Information Technologies and ECommerce Outsourcing Essay
In the era of globalisation, many individuals and countries from different parts of the world become closer. As almost every developed state tries to maintain its wealth and share it with other people who have particular needs, a plethora of transnational companies now communicates and expand all over the planet. The industry of informational technologies and e-commerce is not an exception to the ongoing situation described above. Separate organisations aim at the achievement of their own goals that become possible with the help of such a strategy as outsourcing. This method is considered to be beneficial for both sides of an agreement. Moreover, it has its advantages over regular employing practises as it gives more opportunities to workers, regardless of their physical dislocations. The following paper is intended to critically discuss the main reasons why various organisations outsource IT and e-commerce tasks and what are the crucial issues in managing relationships created with the help of such practises.
To begin with, it would be proper to explain what does the term of outsourcing imply. Outsourcing is an efficient way of collaboration between two companies, which requires one of them to be responsible for particular duties of another corporation in accordance with a corresponding agreement. Usually, businesses use this strategy to reduce the amount of particular work that burdens their employees (Acora 2012). Although this might seem like a regular service, it requires both sides to sign at least a one-year collaboration contract. It would be proper to mention that many organisations use foreign resources to establish such professional relationships as this method is even more beneficial for them. By giving some work to firms from other states, an organisation from a developed country saves much more finances, whereas citizens of some Third World Countries receive an opportunity to have decent incomes.
Reasons Why Organisations Outsource
The following list will enumerate several statements and factors that influence some companies’ decisions to use the model of outsourcing allocation of duties:
There is a wide range of benefits that IT and e-commerce companies enjoy because of their decisions to outsource particular tasks and professional responsibilities. Nevertheless, potential challenges must also be considered when implementing such a strategy to evaluate all the possible outcomes and its necessity. To begin with, it would be proper to mention that sometimes there is no essential need to outsource. In particular cases, it is a wiser decision to pay extra bonuses to employees whom managers trust and work with for an extended period. However, the following list is intended to enumerate several difficulties that might be caused by outsourcing:
After identifying the most important reasons why IT and e-commerce companies implement outsourcing strategies on a regular basis, it would be proper to discuss the points outlined in the previous part of the paper in details. The first major benefit of delegating certain responsibilities to independent workers implies reducing organisational, labour, and resources expenses. As it is mentioned above, foreign outsourcing gains more popularity among modern companies. IT organisations benefit from such a method of collaboration even more than other industries because their products are usually sent via the Internet or other internal networks. In turn, such corporations as Microsoft and Apple are obliged to send required materials to China to ensure high-quality final products to their customers (Ernst & Young 2009). The spheres of informational technologies and e-commerce work on virtual programmes and applications that do not need to be shipped all over the world to deliver them to clients.
Foreign outsourcing is beneficial for both sides of outsourcing contracts as this strategy lets people from developing countries earn more money than average citizens in their states. In turn, people who order IT projects have to pay less due to the high dollar exchange rates in other Commonwealths. India remains one of the most popular countries regarding cheap labour. It is a well-known fact that the native inhabitants of India do not earn many finances at regular jobs. In turn, the world’s IT, new technologies, and e-commerce leaders hire local workers as they have a better education than other candidates, whereas their labour is sometimes twice as cheaper than that of Americans, Britons, French, or Germans. There are separate housing blocks in the Asian country built for It specialists to create more comfortable working conditions for them.
The second place in this chart belongs to China. It is necessary to state that not only its citizens work on foreign IT projects, they manufacture and produce the majority of products sold on the international market. Almost every large firm outsources its tasks to Chinese factories and assembly lines. In turn, Mexican companies are one of the most preferable partners for American colleagues. Due to the short distance, it is possible to deliver the required materials to workers without any limitations. However, all other aspects are almost the same among the three states discussed in this section.
Due to the tendencies described above, many developing and even Third World countries strive to establish many outsourcing services for the citizens of economically strong states. It was stressed that Indians have a better education than some IT workers from The United Kingdom, The United States of America, and the United Arab Emirates (Infosys 2015, p. 3). Despite the fact that all these countries have better Universities and other specialised educational institutions, fewer students commit themselves to the profession of IT developers than their peers in India, China, and Mexico. It appears that the citizens of these Commonwealths strive to study to be employed by large companies in the future. The factor of job satisfaction is defined by salaries in the Third World countries.
Another important factor that companies must consider when outsourcing is the aimed market. Nowadays, there are almost no limits and borders among people from different parts of the world due to the diffusion of the Internet and access to it. Therefore, organisations that specialise in the development of software or other IT products have an opportunity to examine their primary customers. As the situation becomes clear on the markets of various countries, it is more beneficial to hire local professionals to complete some tasks for the transnational IT and e-commerce firms because these workers know their cultural demands and adjust final products appropriately. As a result, more clients’ needs are met and satisfied, which positively influences the product’s demand in a certain territory.
Recently, various European and American IT firms started to delegate their responsibilities to their colleagues from other firms that accept such orders because it reduces the valuable time required for elaborating on more important issues than doing the technical part of any software. Sometimes, the work that IT specialists are obliged to cope with does not demand more than trained enough skills to write code. However, there is another side of the coin that needs a unique and creative approach. For instance, when various computer programmes or smartphone applications are developed, their interface presents one of the most important elements assessed by users (Krug 2013, p. 69). Therefore, it is more beneficial for employees to concentrate their attention on this part of the job, whereas other responsibilities can be outsourced.
There is one more essential reason for outsourcing that sometimes cannot be claimed efficient. This method is known as remote call centres. It would be proper to stress that some corporations support their clients 24/7, which requires them to hire people from other time zones. As these services must operate without hours or days off, IT companies outsource these duties to people who are able to work fixed hours in accordance with their location’s time. Sometimes, clients who use various products of IT companies have particular difficulties with using them. To overcome these issues, they call for technical support of the company that delivers its programmes to them. However, this strategy does not have much in common with regular outsourcing as its measures are compelled.
As it was discussed in the first part of the paper, there is no need for delegating corporations to purchase various equipment for their employees to perform tasks appropriately if they can be assigned to the workers of independent services. As stated by Buss and Peukert, “Previously an unsung hero, outsourcing has matured as approaches have evolved beyond the dash for savings, and ever-more CIOs recognise the value of early and on-going investment in a relationship” (p. 980). Therefore, some businesses use the model of SaaS (Software as a Service).
Crucial Issues in Outsourcing
Although several disadvantages were already discussed above, this section is intended to extend this topic and explain what crucial issues are prevalent in the sphere of IT and e-commerce outsourcing. Unfortunately, this model of collaboration is at its development stage at the moment. Therefore, even the most professional organisations do not outsource all the labour they need to accomplish. It would be proper to mention that working with unknown employees might adversely impact the outcomes of such work. It is necessary to stress that when companies experience problems of this severity in
their working processes, they’re unlikely to utilize the outsourcing method again.
Different Perceptions of Work Conceptions
Talking about the collaboration with foreign firm or freelancers, the problem of different views on the conception of completed projects might differ among customers and their remote employees. It’s important to get a mutual understanding of the complete work’s conception for those who try it. You can find two reasons that may result in various misunderstanding between colleagues. The initial problem is the insufficient explanation of specific requirements or general information regarding a certain project. To build up any product properly, IT specialists got to know its final function, purpose, and sphere of implementation (Lihong 2012, p. 5). Another problem is nearly always disregarded by companies that outsource services for the very first time. This matter implies various views on a single work by folks of different cultural backgrounds. It would appear that citizens of such countries because the United states, India, China, and Mexico have significant differences within their cultures and national customs. This factor might adversely impact various collaborations among professionals from these and several other states because of their varying perceptions of these primary responsibilities, and presentations of the ultimate products they need to submit.
Due to common complaints and customers’ work results dissatisfactions, flagman outsourcing corporations from the Parts of asia mentioned previously, Eastern Europe, and the Philippines didn’t leave the issue of inappropriate work perception unaddressed. In order to avoid multiple misunderstanding later on, IT developers must undergo professional courses in English and meet all of the customers’ requests. Once both sides reach a consensus, an order has been processed accordingly. Nevertheless, because of the fact there are multiple outsourcing companies across the world, it is impossible to allow them to meet the requirements mentioned previously. The marketplace is overwhelmed with new and young businesses. Unfortunately, these players aren’t responsible for the task they provide with their customers. Actually, these organisations will not have enough financial methods to provide educational courses with their employees (Moon et al. 2016, p. 156). It’s important to keep in mind that multiple mistakes within every project influence trustworthiness of the complete company. Hence, citizens of america of America, the uk, and the United Arab Emirates will probably establish collaborations with already professional services, whereas young companies usually walk out business because of the inability to compete appropriately.
Violations of Non-Disclosure Regulations
Sometimes, such popular companies as Apple, Microsoft, Sony, along with other software developers face unfortunate outcomes of outsourcing and collaborating with foreign colleagues. Even though every hired employee must sign a non-disclosure document about his / her job before focusing on particular orders, there have been many cases when transnational corporations had information leaks. For example, such areas of IT products as their external design and innovative functions are available on the web before their official releases. Usually, it is really because foreign workers utilize the information they operate because of their own benefits. It could be proper to mention there are many pirate organisations that gladly pay these folks for sharing confidential information using them. Actually, they guarantee that the trustworthiness of these employees will stay the same since it is impossible to get the leak of the info in a large company.
There’s another approach to fraudulence in the sphere of IT and e-commerce outsourcing. In case a worker neglects their rating and degree of reliability among foreign customers, one might sell illegal copies of any product produced by this person. Usually, these copies usually do not change from original versions of varied programmes or software architectures. However, these products’ prices are lower than the ones in the marketplace, whereas the product quality remains the same. Due to the identical IT products available online free of charge, some people don’t have any have to buy and pay their money for official releases of certain programmes. This type of factor adversely impacts the IT transnational market all together because official creators receive less financial support from their clients along with other consumers. Because of this, they might not need enough money to build up and create new and much more efficient products later on.
Since it was mentioned above, gleam tremendous chance for intellectual property loss. As mentioned by Buss and Peukert, “Outsourcing will not only enable the firm to understand concerning the technology of other firms but additionally other firms find out about the technology of the focal firm” (p. 979). Actually, when any project is outsourced, its final version will not belong to a person organisation yet until it patents it. Hence, employees who seek additional income usually do not hesitate to patent their works and declare that they remain legal owners of varied IT products, irrespective of multiple job agreements that restrict them from committing such actions.
It really is obvious that remote collaboration includes a particular drawback, comparing compared to that in regular conditions. One of these brilliant issues is presented by the truth that managers cannot control how their work instructions are followed or elaborated on by employees of outsourcing companies. Sometimes, this factor is essential because superiors might point at particular mistakes or other points of dissatisfaction. If you find no capability to control the progress of any project, customers will probably express their negative impressions because of the development of an application that will not meet their expectations. Actually, remote workers are absolve to choose various solutions to complete their projects faster. Using instances, such an method of work might trigger low-quality final submissions. It will be proper to say that having less control could be beneficial sometimes because a worker will not get interrupted by his / her manager regularly, which lets one focus on various projects’ accomplishments (NashTech 2014, p. 2). To lessen all of the possible risks that may occur due to remote collaboration disadvantages, some corporations receive an capability to control their employees by obligating them to fill daily reports and submit separate completed elements of every project.
Although the issue of poor comprehension is really a consequence of the idea discussed in the initial crucial issues paragraph, it must be explained separately due to its high importance. When beginners focus on various outsourced IT projects from large corporations, they could not meet certain requirements expected by their customers because of their poor comprehension or interpretation of initial instructions. Unfortunately, the role of cultural barriers plays a substantial role in this issue. Once the tasks are complex, employees may not perceive them appropriately because of the insufficient knowledge regarding spanish. Sometimes, misunderstandings occur on the soil of misunderstandings between clients and professional workers who might complete a not requested work in error. At the beginning of these careers, it will be proper for those who focus on outsourced projects to consult native speakers and have them to steer the employees in the event of wrong interpretations. This method of this question might prevent a significant waste of time along with other resources.
Although the approach to outsourcing has many issues currently moment, they’ll be eliminated later because this industry develops rapidly. In today’s world, people create satisfactory services if someone is preparing to pay enough money for that. Today’s digital era opens new opportunities for this and e-commerce professionals from developing countries (Nduwimfura & Zheng 2015, p. 29). Perhaps, the complete planet might become “borderless” due to the tremendous changes that eventually transnational communities, people’s cultural values, and so forth. Not only outsourcing is an effective approach to collaboration and tasks delegation, but it addittionally can be an essential practice for patriots who usually do not desire to leave their motherlands to build up in other states and work with large companies that would rather hire foreign employees due to high-income taxes and salaries within their Commonwealths.
It will be proper to say that the discussed collaboration method is really a beneficial strategy for any business, no matter its primary activities, specialisation, amount of clients, and several other factors. Moreover, even beginner organisations can successfully hire a colleague online with the aid of multiple specific web resources for freelancers. It would appear that professional workers from such countries as India, Poland, Bulgaria, Russia, among others are encouraged to work with foreign corporations because local firms usually do not provide enough financial opportinity for visitors to live without essential needs (such as for example good food, clothes, housing, method of transport, and so forth).
Since it is mentioned previously, outsourcing will not always imply collaboration with folks from abroad. For instance, there are several centres in the usa of America, the uk, and the United Arab Emirates offering exactly the same outsourcing services. Indeed, it really is much easier to employ workers from these organisations because they’re obliged to check out local laws that prevent them from allowing a few of the crucial issues discussed above to occur. However, nearly all companies seek more solutions to save their money that may be spent on
the development of new technologies that can be integrated into their products in the future.
Nowadays, there is a wide range of delegation options available on the international market. The main topic of this paper is IT outsourcing that remains one of the most popular spheres in such practises as it has been developing for an extended period. Unfortunately, people from different parts of the world were limited in their actions until the 1990s (Sayre et al. 2012, p. 4). Earlier, computers did not have enough power and functions to work with professional programmes and maintain global communication. As the sphere of computer hardware and software develops, freelancers or employees of outsourcing companies can now receive certain tasks from their foreign clients without any limitations.
It is necessary to mention that information technology outsourcing does not always imply working on various processes related to the given industry. In the majority of instances, hired workers are required to complete complex tasks to elaborate on the entire infrastructure of their IT customers. The most popular corporations that use the services of foreign professionals are IBM, HP, and Microsoft. Sometimes, these companies request their workers from abroad to accomplish their internal tasks that require purchasing or renting their program products, applications, other technical means and infrastructure fragments. The easiest outsourcing practice implies the usage of the customer company’s online hosting. Nowadays, such a method of international collaboration has become one of the most popular services in the transnational IT market. It would be proper to stress that outsourcing might be presented as a campaign organised by a particular corporation that provides a wide range of services for any of its clients. Moreover, sometimes these organisations may accept various orders that they do not offer on a regular basis (Thinbodeau 2016, p. 3). Managers find new employees that have narrow IT specialisations to satisfy their customers with high-quality work. However, such situations are minor. Indeed, clients prefer to focus only on a separate service, instead of having one organisation developing all the necessary products. In fact, large corporations hire workers from different outsourcing services.
Despite the various responsibilities of IT developers and other employees involved in this sphere, the most popular outsourcing method is the maintenance of computers. Such a strategy allows customers to acquire a full range of services that do not require them to hire system administrators. The maintenance of computers includes the following responsibilities:
It would be proper to mention that many outsourcing firms earn most of their monthly profits by providing the following services:
Another important model of IT outsourcing is SaaS (Software as a Service). Unlike regular hosting workers, employees who follow the discussed scheme must install all the necessary equipment for the placement of informational systems and maintain all this apparatus’s constant work, and update it when necessary. It would be proper to state that the clients are required to cover hardware rental services of outsourcing companies (Thinbodeau 2016). Therefore, customers must not spend many corporate financial means to purchase all the necessary equipment that is required by many IT companies. The given methodology does not obligate people to buy licensed programmes, monthly payments for which might also become significant.
Outsourcing is one of the most common employing techniques in the sphere of IT and e-commerce today. Many companies prefer to hire workers from abroad as they receive fewer payments and perform their tasks more professionally than local specialists. As in every other sphere, outsourcing has its advantages and significant disadvantages. As it is mentioned above, the first beneficial part of such collaboration implies less corporate labour expenses than traditional methods. Also, this gives global organisations the ability to work with skilled professionals from other countries who might have better educational backgrounds and richer experiences than their colleagues from other parts of the world.
Moreover, clients are satisfied with the improved level of outsourcing companies’ responsiveness. However, there is another side of the coin because some people do not support and establish the given relationships policy with foreign firms. Such concerns occur due to the fact that corrupted employees might steal valuable intellectual property and sell it to pirates to gain extra profit. Moreover, some managers are dissatisfied with the fact that they are not able to control the work of people who receive money from them. It would be proper to mention that freelancers who work for outsourcing organisations often neglect certain parameters of their responsibilities. In general, IT outsourcing is a great opportunity for professionals from developing countries and transnational corporations. However, some aspects of this collaboration model have to be improved to avoid common misunderstandings.
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