Offshoring of U.S. Service Sector Jobs
University of Texas
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 there is some empirical evidence that the business service industries are increasingly offshoring operations to improve their cost structure as well as develop added capacity and improve their capabilities. In this paper we will discuss how the process of offshoring has impacted the business service industry by providing them profit maximization, service demand, production and cost minimization.
A globalizing economy along with inexpensive telecommunications technology is making it...