Information Technology Outsourcing
Encyclopedia
Information technology outsourcing or ITO is a company's outsourcing
of computer or Internet related work, such as programming, to other companies. It is used in reference to business process outsourcing
or BPO, which is the outsourcing of the work that does not require much of technical skills.
and strong cultural ties between the domestic and Asian information technology industries have led many companies to outsource labor-intensive software programming to Asia and Eastern Europe.
India has always been a major player in information technology (IT); they even make their own supercomputers for predicting monsoons. It wasn't until the Y2K bug emerged that the need for legions of cheap programmers really arose, however, and American companies began to see the potential for outsourcing overseas. After Y2K the IT service industry exploded, with American companies outsourcing everything from data entry to customer service to India and other Asian countries.
Despite its distinct advantages for companies looking to outsource their IT services, India's volatile political climate and rampant corruption present problems. Some of the 185 Fortune 500 companies that outsource software to Asia are choosing places like Vietnam or China with more predictable politics and less corruption. Other companies that outsource their customer service are finding that their customers prefer the Americanized English of the Philippines to the British English that predominates in India, though all of these countries have their drawbacks, from censored Internet lines in China and Vietnam to Muslim militancy in the Philippines.
Despite the hiccups the IT service industry continues to grow as the software industry becomes more competitive and U.S. companies try to reduce overhead. The Asian IT service market is still in its infancy, but by 2008 industry think tank Nasscom-McKinsey predicts a $17 billion IT service industry in India alone.
Outsourcing
Outsourcing is the process of contracting a business function to someone else.-Overview:The term outsourcing is used inconsistently but usually involves the contracting out of a business function - commonly one previously performed in-house - to an external provider...
of computer or Internet related work, such as programming, to other companies. It is used in reference to business process outsourcing
Business process outsourcing
Business process outsourcing is a subset of outsourcing that involves the contracting of the operations and responsibilities of specific business functions to a third-party service provider. Originally, this was associated with manufacturing firms, such as Coca Cola that outsourced large segments...
or BPO, which is the outsourcing of the work that does not require much of technical skills.
IT outsourcing drivers
The reasons for IT outsourcing include lack of resources and cost reduction. IT Outsourcing is sometimes called IT Enabled Services (ITES) Outsourcing.Overseas ITO to India and China
The typical destinations of overseas IT outsourcing are India and Philippines for the American and European companies and China for the Japanese companies.Outsourcing information technology to Asia
A combination of high overhead in the United StatesUnited States
The United States of America is a federal constitutional republic comprising fifty states and a federal district...
and strong cultural ties between the domestic and Asian information technology industries have led many companies to outsource labor-intensive software programming to Asia and Eastern Europe.
India has always been a major player in information technology (IT); they even make their own supercomputers for predicting monsoons. It wasn't until the Y2K bug emerged that the need for legions of cheap programmers really arose, however, and American companies began to see the potential for outsourcing overseas. After Y2K the IT service industry exploded, with American companies outsourcing everything from data entry to customer service to India and other Asian countries.
Despite its distinct advantages for companies looking to outsource their IT services, India's volatile political climate and rampant corruption present problems. Some of the 185 Fortune 500 companies that outsource software to Asia are choosing places like Vietnam or China with more predictable politics and less corruption. Other companies that outsource their customer service are finding that their customers prefer the Americanized English of the Philippines to the British English that predominates in India, though all of these countries have their drawbacks, from censored Internet lines in China and Vietnam to Muslim militancy in the Philippines.
Despite the hiccups the IT service industry continues to grow as the software industry becomes more competitive and U.S. companies try to reduce overhead. The Asian IT service market is still in its infancy, but by 2008 industry think tank Nasscom-McKinsey predicts a $17 billion IT service industry in India alone.
Outsourcing Tools
| Category | Tools |
|---|---|
| Communications | EMail Email Electronic mail, commonly known as email or e-mail, is a method of exchanging digital messages from an author to one or more recipients. Modern email operates across the Internet or other computer networks. Some early email systems required that the author and the recipient both be online at the... , Skype Skype Skype is a software application that allows users to make voice and video calls and chat over the Internet. Calls to other users within the Skype service are free, while calls to both traditional landline telephones and mobile phones can be made for a fee using a debit-based user account system... , Video Conference, etc; |
| Business Requirements Prototyping | Microsoft Office Microsoft Office Microsoft Office is a non-free commercial office suite of inter-related desktop applications, servers and services for the Microsoft Windows and Mac OS X operating systems, introduced by Microsoft in August 1, 1989. Initially a marketing term for a bundled set of applications, the first version of... , iRise IRise iRise is a software company based in El Segundo, California. It provides visualization software for business applications.-History:Founded in 1996 by Maurice Martin under the name of Intrasolv Consulting. Co-Founder Emmet B. Keeffe III joined in 1998... , Rational Requisite Pros and Rational Rose (from IBM) |
| Source Control | Assembla Assembla Assembla is a collaborative project management service for open-source and commercial software. The service rents development applications to other companies online, reducing the cost of software development.-History:... |
| Code Quality Analysis | List of tools for static code analysis |
| Project Management | Comparison of project management software |
| Testing | Test Director, Mercury Quality Center (for test cases and testing), |
See also
- Offshore programming
- Software testing outsourcingSoftware testing outsourcingSoftware testing outsourcing provides for software testing carried out by the forces of an additionally engaged company or a group of people not directly involved in the process of software development...
- Website Management Outsourcing
- OutsourcingOutsourcingOutsourcing is the process of contracting a business function to someone else.-Overview:The term outsourcing is used inconsistently but usually involves the contracting out of a business function - commonly one previously performed in-house - to an external provider...
- OffshoringOffshoringOffshoring describes the relocation by a company of a business process from one country to another—typically an operational process, such as manufacturing, or supporting processes, such as accounting. Even state governments employ offshoring...
- Offshoring Research NetworkOffshoring Research NetworkThe Offshoring Research Network is an international network of researchers and practitioners studying organizations in their transition to globalizing their business functions, processes and administrative services...
- GlobalizationGlobalizationGlobalization refers to the increasingly global relationships of culture, people and economic activity. Most often, it refers to economics: the global distribution of the production of goods and services, through reduction of barriers to international trade such as tariffs, export fees, and import...