...Kristen Valla BBMBA 9111 Case Study 1 Offshoring at Global Information Systems, Inc. Background/Overview In 2004, Global Information Systems, Inc. began to put into motion the consideration of offshoring 3,000 jobs from here in the U.S to company locations in China, India and Brazil. These were highly compensated job positions. About half of GIS is separated into a division known as Global Services Divisions. A considerable portion of GSD’s business came from customers outsourcing their business process needs. GSD began to seek ways to cut costs and improve performance by “offshoring” certain activities in order to present the most attractive value proposition to potential customers. This case examines the issue of offshoring high-tech jobs different perspectives. The topics presented include determining the stock price effects of offshoring, examining the economic consequences of offshore work for both transmitting and receiving countries, when the consequences of non-competitive offshoring, and thinking about the challenge of investing in a career that is vulnerable to future offshoring. Opportunities/Challenges GSD has programming centers established in Bangalore, India; Shanghai and Dalian in China as well as Sumare, Brazil. That being said, with profit being a company’s number one concern, GSD could only consider the possibility of replacing jobs here in the United States with jobs offshore. The dollar amount of savings would be staggering. When all is...
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...Contemporary Challenges for IT Managers Tutorial 3 Topic(s): Globalisation, Outsourcing / Offshoring Instructions: Due: Tutorials 1-4 due 4:00pm on Friday of Week 4 Where to submit: Moodle 1. What information is provided or issues raised by the video on the slide titled“Globalisation – Video 1” in the “Globalisation” lecture? 2. What is Globalisation? * Globalization is a new contemporary stage of development of capitalism over the world. It is a process of social change in which geographic and cultural barriers are reduced. Also is the process of transformation of local or regional things or phenomena into global ones. 3. What information is provided or issues raised by the video on the slide titled “Globalisation – Video 2” in the “Globalisation” lecture? 4. How was early globalisation characterised? * The first phase of globalisation in the late nineteenth century was characterised by an integration of markets through an exchange of goods that was facilitated by the movement of capital and labour across national boundaries. * The second phase of globalisation is characterised by an integration of production with linkages that are wider and deeper. 5. Describe the forces that drove globalisation. * Berlin Wall/ Communism * Windows * World Wide Web (WWW) * Work Flow Software / Standards * Uploading * Outsourcing * Offshoring ...
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...globe are capitalizing on offshoring to achieve business competiveness. In the last 3 years or so, offshore IT has assumed new forms to include offshoring of business processes. Offshoring of IT is intensifying and firms are strategically leveraging offshore capability and the structural cost savings, while also focusing on deriving operational innovation. Robust models and quality and project management processes are employed to unleash the benefits of offshore IT. The same complexities and challenges still exist, some even growing in their scale and assuming new dimensions. Although many refined and proven managerial and organizational practises and technological tools and infrastructures, are now available, the challenges and constraints involved in managing offshore IT are far from gone. The art of managing offshore IT work is still evolving While there exist tangible and high visibility benefits of offshoring IT operations, they come along with certain riders. We will look at certain hidden costs that have the potential to either reduce savings considerably. Companies that want to succeed in offshoring, shall avoid the below statements. Pursuing the Low-Cost Worker: Offshoring is not only about sending processes to places that will execute at low labour cost. That, today, is no longer the primary reason offshoring is adopted. Quality is of equal or, sometimes, more importance. Businesses, instead, are proceeding with caution and only select offshoring as a strategic option...
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...version of the paper prepared for IMRC 2006 conference on Global Competitiveness through Outsourcing: Implications for Services & Manufacturing, Indian Institute of Management (IIM), Bangalore, July 13-15, 2006. Abstract This paper analyses the implications of differing global demographic trends for India’s competitiveness in outsourcing and offshoring. It also briefly notes the implications of differing demographic trends among the Indian states. The paper argues that demographic complementarities with high-income countries provide India with one-time opportunity to sustain its growth rate and occupy all segments of global outsourcing and offshoring activities. India has used the labor cost advantage to gain reasonable market share in these activities. It however faces serious internal and external challenges in sustaining its international competitiveness, particularly with respect to labor cost. With sustained focus on human resource development, diversification and upgradation policies India can continue to atleast maintain its global market share, and help nurture globally competitive companies. Keywords: Outsourcing, Offshoring, Globalization. India, Demographic Trends, -1- I. Introduction Outsourcing has been among the most extensively debated public policy...
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...Robert Management 4020 1 May 2011 Look Into the Practice of Offshoring DEFINITION According to the book Fundamentals of Human Resource Management, offshoring is the practice of “moving operations from the country where a company is headquartered to a country where pay rates are lower but necessary skills are available” (Noe et. al. 41). The practice of offshoring in the United States dates back to as far as 1970s. It begins with the practice of outsourcing, which, according to the book is “the practice of having another company (vendor, third-party provider, or consultant) provide services” (Noe et. al 40). By outsourcing work to a third party which actually specializes in the field of service, a company will be able to operate more efficiently and focus more on their core competencies. Offshoring is the short for ‘offshore outsourcing’. In offshoring, not only is the work being performed by another company, it is also being performed overseas. As globalization becomes a recent trend and people can easily communicate and send information through the internet, most companies nowadays are practicing offshoring. Instead of hiring workers from inside the US, companies are recruiting their employees from a global workforce and moving their operations overseas to look for talented people who are willing to work just as hard (or even harder) for a lower cost. BENEFITS AND DISADVANTAGES Most companies who practice offshoring admits that cost saving is the number one reason for them...
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...Company report on cross border offshoring management, cultural dimensions and gamification Table of Contents Table of Contents Executive Summary | p.5 | Chapter I – Introduction1.1 Purpose of the Report1.2 Effects of Globalization on Businesses’ 1.3 Company Background1.4 Outline of the Report | pp.6-7 | Chapter II – Cross Border and Offshoring Management 2.1 Introduction2.2 Defining culture2.3 Defining management and cross cultural management 2.4 Offshoring2.5 Key problems in cross cultural teams2.6 Conclusions | pp.8-11 | Chapter III – Analyzing and Explaining Cultural Dimensions3.1 Introduction3.2 Analysis of cultural dimensions and Country Comparisons 3.2.1 Power Distance 3.2.2 Uncertainty Avoidance 3.2.3 Long term orientation 3.2.4 Indulgence 3.2.5 Individualism 3.2.6 Masculinity 3.3 Limitations of Hofstede’s Dimensions | pp.12-17 | Chapter IV – Gamification4.1 Introduction4.2 Defining and Explaining gamification4.3 Gamification’s effects on business4.4 Examples of gamification4.5 Criticism – The dark side of gamification | pp.18-20 | Chapter V – Corporate Social Responsibility5.1 Introduction5.2 Defining and explaining CSR 5.3 The Foxconn and Apple scandal5.4 Recommendations and Actions | pp.21-22 | Chapter VI – Recommendations to Management | pp.23-24 | Chapter VII – Conclusions | pp.25 | References | pp.26-27 | Executive Summary Executive Summary This report provides an analysis and evaluation of...
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...are companies offshoring innovation? The emerging global race for talent Arie Y Lewin1, Silvia Massini2 and Carine Peeters3 The Fuqua School of Business, Duke University, Durham, USA; 2Manchester Business School, University of Manchester, Manchester, UK; 3 Solvay Brussels School of Economics and Management, Brussels, Belgium Correspondence: AY Lewin, The Fuqua School of Business, Duke University, 1 Towerview Drive, Box 90120, Durham, NC 27708, USA. Tel: þ 1 919 660 7654; Fax: þ 1 919 660 7769 1 Abstract This paper empirically studies determinants of decision by companies to offshore innovation activities. It uses survey data from the international Offshoring Research Network project to estimate the impact of managerial intentionality, past experience, and environmental factors on the probability of offshoring innovation projects. The results show that the emerging shortage of highly skilled science and engineering talent in the US and, more generally, the need to access qualified personnel are important explanatory factors for offshoring innovation decisions. Moreover, contrary to drivers of many other functions, labor arbitrage is less important than other forms of cost savings. The paper concludes with a discussion of the changing dynamics underlying offshoring of innovation activities, suggesting that companies are entering a global race for talent. Journal of International Business Studies (2009) 40, 901–925. doi:10.1057/jibs.2008.92 Keywords: offshoring; innovation;...
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...Mini Case Study p59-60 Wayland Baptist University – San Antonio International Management MGMT 5326-SA01 Dr. W. Chukwuma Achebe Richard D. Stephens Jr. September 6, 2013 Abstract As the world becomes increasing dependent on information technology (IT) products and services, the global IT services outsourcing industry has increased exponentially. Efforts to reduce costs and focus more on their core competencies have corporations outsourcing and offshoring many of their IT services. Offshoring of IT services have been growing at 40 to 50 percent a year. Brazil, like India, has stepped up to the challenge and has begun a campaign to build a strong international competitive position in the IT offshoring business. This researcher was asked to analyze Brazil’s intentions and actions regarding the international information technology sector using theories presented in International Business: The Challenge of Global Competition and provide recommendations to the Brazilian government and its outsourcing industry in order to improve their prospects for success in building a strong international competitive position in the information technology outsourcing business. Although Brazil is currently lagging behind India in IT outsourcing it is the 5th largest country and 11th most powerful economy in the world and with the right government infrastructure investments, Brazil could easily move up in its standings. Case Analysis 1. Use the...
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...Offshoring Impact on U.S. Software Engineers for Leadership and Organizational Behavior Thesis: In my workplace, we have been outsourcing some technical work to Mexico. It has been interesting the feedback we are getting from our programmers. Although we’re outsourcing only when the work exceeds our capacity, they’re rightly concern about their jobs; they are concern about offshoring. I would like to write a feasibility analysis of offshoring work for my class project. I would like to be specific to “offshoring impact to software engineers”. April 17, 2011 Contents Offshoring Impact on U.S. Software Engineers 1 Contents 2 1 Introduction 3 1.1 Definitions 3 1.2 Summary 3 2 Data Section 4 2.1 Offshoring from a political perspective 4 2.2 Offshoring from a business perspective 7 2.3 Offshoring from software engineers perspective 9 3 Conclusion 11 3.1 Summary of Findings 11 3.2 Recommendations 11 4 Appendices 13 4.1 2008 Projected Base Salary Increases 13 5 Bibliography 14 1 Introduction 1.1 Definitions According to United States Department of Labor, software engineers (job 15-1031) develop, create, and modify general computer applications software or specialized utility programs. Analyze user needs and develop software solutions. Design software or customize software for client use with the aim of optimizing operational efficiency. May analyze and design databases within an application area, working individually or coordinating database...
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...global audience to find gold within its mine by accommodating a Goldcorp challenge. As a result, many scientists, geologists, and engineers from all around the world joined, downloading the company’s data and began seeking online. 6. Why was Y2K so important to the Indian economy? Because of the dilemma and distress everyone around was dealing with Y2K, it opened up a job opportunity for the techies of India of computer remediation work. It led to an increased demand of Indian brainpower in order to get the programming work done. It created outsourcing through the combination and collaboration of PCs, the Internet, and fiber-optic cables. 7. In what way did India benefit from the dotcom bust? India benefitted from the dotcom bust because it allowed the nation to be connected with the rest of the world through cables that were virtually free. More American companies began using fiber-optic cables to expand knowledge to those in India. 8. What is offshoring and why is it such an important flattener? Offshoring is moving a company’s manufacturing department to a different area in order to take advantage of cheaper productions. It is such an important flattener because it brought forth competition between different nations as well as the creation of collaborations between a few. 9. Why is China such an important player with regards to offshoring? China is such an important player with regards of offshoring because it developed production asea, integrating these into their global...
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...LEGO is one of top toy-making companies established in Denmark. Its core and iconic product is the LEGO brick with its own unique design, interlocking tubes, which can expand building possibilities. In 2004, LEGO started to outsource 80 percent of its production to Flextronics, a large Singaporean manufacturing service provider, but after three years, LEGO had to end this cooperation. Therefore, we are going to do a deeper analysis of this case and have a better understanding of outsourcing. LEGO had two main expectations from the collaboration with Flextronics. The first one was that LEGO intended to run a cost-saving business model by licensing out 80 percent of production to Flextronics. Before outsourcing to Flextronics, LEGO conducted its production mainly in Denmark, the United States, Switzerland and so forth, which are high-cost countries. In order to reduce production cost efficiently and response the global trend that nearly 95 percent toy production went to Asian countries quickly, LEGO chose Flextronics as its partner to accomplish the goal. From 2004 to 2006, some of production capacity in Denmark and Switzerland were moved to Flextronics’ plants in Hungary, LEGO handed over the operational control authority of Kladno site in the Czech Republic to Flextronics, and Flextronics opened a new plant in Mexico; instead, LEGO shut down the factory in the United States. Another expectation that LEGO wanted from the relationship of Flextronics was that the LEGO group would...
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...re-organisation, and changes in the political and regulatory environment present challenges and opportunities to firm finance and accounting functions to improve their value-add contributions to the business. One such opportunity is the offshore outsourcing of finance and accounting services. The business process outsourcing (BPO) market has grown substantially over the last decade and is expected to continue to increase rapidly. Offshore financial institutions can also be used for illicit purposes such as money laundering and tax evasion. Many countries, territories and jurisdictions have offshore financial centers (OFCs). These include well-known centers like Switzerland, Bermuda and the Cayman Islands, and less-well-known centers like Mauritius, Dublin and Belize. The level of regulatory standards and transparency differs widely among OFCs. Supporters of OFCs argue that they improve the flow of capital and facilitate international business transactions. ‘Outsourcing’ is the management and / or daily execution of a business function by a third-party service provider. Firms have been encouraged to outsource non-critical areas of business in order to focus on core competences (Quinn et al, 1990). There are many different outsourcing models, including the outsourcing of activities to firms in foreign ‘host country’ locations, which is called ‘offshoring’, and is the focus of this report. Offshoring means located or based outside of one's national boundaries. The term offshore...
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...Offshoring of U.S. Service Sector Jobs Sheila Brown Busb 315 University of Texas Abstract Outsourcing is the agreement of diverse functions, such as data entry, programming, facilities management, disaster recovery, and telecommunications management, to outside providers of services. The main reason why organizations implement outsourcing is cost reduction, to leverage themselves ahead of their competitors, and as a means to increase their adaptability to changes in the business world. Outsourcing also provides the ability to benefit from the advances in information technology, while focusing on core business activities of the organization. Not only does outsourcing information technology functions enable increased concentrated efforts toward the organizational mission, but if skillfully planned and properly managed, contributes to healthy growth in the company’s fiscal bottom line. The implementation of offshoring has affected the competition and the expansion of the business service industry in an increasingly accessible and competitive global world. The effect of Outsourcing Within The Business Services Industry The business service industry has been impacted with intense pressures of reducing costs while also increasing new customers and introducing new products to create a center of attention to those customers. Lately, more companies are implementing offshoring strategies (i.e. outsourcing of operations to foreign countries) to cut costs. However...
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...S COLOPLAST A/S — ORGANIZATIONAL CHALLENGES IN OFFSHORING w 9B08M031 Ivey Management Services prohibits any form of reproduction, storage or transmittal without its written permission. Reproduction of this material is not covered under authorization by any reproduction rights organization. To order copies or request permission to reproduce materials, contact Ivey Publishing, Ivey Management Services, c/o Richard Ivey School of Business, The University of Western Ontario, London, Ontario, Canada, N6A 3K7; phone (519) 661-3208; fax (519) 661-3882; e-mail cases@ivey.uwo.ca. Copyright © 2008, Ivey Management Services Educational material supplied by The Case Centre Copyright encoded A76HM-JUJ9K-PJMN9I Order reference F240103 Version: (A) 2008-06-24 INTRODUCTION Director Allan Rasmussen took a good deal of pride in the achievements of Coloplast A/S1 (Coloplast) in Tatabánya, Hungary. In consecutive quarters in 2004, the plant had outperformed the company’s longer established Danish production units in quality levels (see Exhibit 1). Rasmussen had been the Tatabánya plant’s manager, its first, since 2001. Just three and a half years later, he was responsible for the daily management of a plant with a head count of 550 and production valued at 1.5 billion Danish kroner (DKK). In 2005, he resumed his position as director of Coloplast’s Danish subsidiary and returned to Denmark. With the Hungarian operation, Coloplast had learned important lessons in designing and implementing...
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...IS)service)or)product)that)requires)considerable)security) or)confiden;ality.) Outsourcing) • Purchase)of)a)good)or)service)that)was)previously) provided)internally) • Drivers):) – Cost)reduc;on)) • Outsourcing)providers)derived)savings)from)economies)of)scale.) – Centralized)data)centers) – Preferen;al)contracts)with)suppliers) – Large)pools)of)technical)exper;se) – Help)a)company)transi;on)to)new)technologies) • IS)staff)within)a)single)company)only)have)limited)experience.) • Outsourcing)providers)generally)offer)access)to)larger)IT)talent)pools)and)more) current)knowledge)of)advancing)technologies.) – Bringing)in)outside)exper;se)can)help)management)focus)more)on) core)ac;vi;es)rather)than)on)IT)issues) Outsourcing)#)Challenges) • A)degree)of)control)is)surrendered)over)cri;cal) aspects)of)the)enterprise.) – By)turning)over)data)center)opera;ons,)a)company)puts) itself)at)the)mercy)of)an)outsourcing)provider’s)ability)to) manage)this)func;on)effec;vely.) – A)manager)must)choose)an)outsourcing)provider) carefully)and)nego;ate)terms)that)will)support)an) effec;ve)working)rela;onship.)) • Company)gives)up)any)real)poten;al)to)develop)their) informa;on)technologies)for)compe;;ve)advantage.) – The)outsourcing)provider)becomes)the)primary)owner)of) any)technological)solu;ons)developed,)which)allows)the) outsourcing)provider)to)leverage)the)knowledge)to)...
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