Global Outsourcing: Advantages, Challenges, and Legal Aspects

This report provides an overview of global outsourcing, focusing on IT outsourcing (ITO). It covers the advantages of ITO, such as reduced costs, access to external markets, enhanced efficiency, improved skills, and faster business processes. The report also delves into the challenges of ITO, including infrastructural issues, market competition, and the dynamic nature of the IT industry, which can affect outsourcing and maintenance. Furthermore, it addresses legal frameworks, contracts, and common legal challenges related to third-party involvement, such as IP regulations, labor law differences, and data management. The report highlights the importance of business contracts, legal requirements, and ethical considerations for successful ITO implementation, emphasizing the need for a comprehensive framework to manage risks and ensure compliance. The report refers to the work of Bharadwaj & Chen (2017), Ashri, Kotlarsky, Willcocks (2015), Hammer (2015), Love & Hoper (2015), Dhar (2012), Martin (2016), Marion & Fiar (2012), Yu (2011), Krutz, & Vines (2010), and Liedtka & Ogilvie (2011) to support its arguments.

Global Outsourcing
NOTES

Slide 1-2:
Global Outsourcing includes IT outsourcing which involves contracting basic concepts such
as intensive exchange of data, IP sharing and computer services from external suppiers
(Bharadwaj & Chen, 2017). Global outsourcing therefore provides third party IT services to
businesses and individuals. Among these is service delivery, software services and cloud
computing (Ashri, Kotlarsky, Willcocks, 2015) . Companies outsource crucial management
services in planning, business analysis and network servicing.
Slide 3
Advantages of ITO vary. In the 21st Century innovation has improved performance in many
organizations because of
1. Reduced costs
2. External market access to expert IT services
3. Enhanced efficiency
4. Improved skills
5. Speedy business processes and project completion ( BPO benefits)
Slide 4
The reduced costs factor incudes cost effectiveness which highlighting some of its advantages
to the organization and individual. Companies hire external IT systems professionals for
software installations and diagnostics. People download training material online for small
business and office operations. This includes Microsoft Office, Accounting and Inventory
software. Sharing work with an outside supplier is effective in cost management because it
lowers management costs (Hammer, 2015). It includes operation costs like recruitment,
training and office functions. Individuals also benefit from affordable computer services
including software services.
Slide 5
Access to external markets reveals that individuals can tap into the global markets through
ITO. These includes services that are unavailable or deficient in the local and regional
environment ( Love & Hoper, 2015). Specialized agencies include, marketing, customer
support, E-commerce, procurement and business management/expert support.
Slide 6-7

Efficient outsourcing prevents unnecessary repetition of actions because of imperfect
operations. This saves, time and resources. Evolved outsourcing caters for group functions
such as cloud computing and video conferencing which enables managers to work effectively
( Dhar, 2012). Efficiency through innovation creates performance , improved practices and
better service delivery. Outsourcing IT is one way to maintain quality and return on profits.
Highlight the efficiency benefits of ITO indicating its connection to business operations and
performance. Research indicates that ITO offers efficiency through convenient services
available online.
Slide 8
Martin ( 2016) identifies the benefits of outsourcing skilled workforce. The IT industry is
dynamic and affects all businesses. IT professionals from across the world work as
consultants and experts in specific fields through outsourcing. It fills the gap in skilled deficit
and provides flexible working arrangements.
Slide 9
Business transformation is expensive and may take time. However, innovative ideas in e-
commerce allow companies to make money during project development through virtual
offices. Automated configurations and processes such as websites, social media and mobile
enable companies to outsource services using temporary platforms. This ensures continuity
and prevents gaps in an business operation. Outsourcing software applications and website
development improves speed for faster and convenient services. Outsourcing professional
services includes software developers for customized company details (Marion & Fiar, 2012)
Slide 10-11
Technological advancement is not constant. Despite the benefits, ITO comes with challenges
including:
• Dynamic IT industry causes changes in its outsourcing
• Competitiveness in the markets brings
• Infrastructural challenges hinder implementation of outsourced IT software
• Maintenance of an outsourced technology requires skills
• Control of outsourced services
• Market ccompetition
• Market prices

• IPO challenges ( Yu, 2011)
Slide 12
Market Competition considers market prices, shares and IPO challenges. It elaborates on the
competition challenges including price and market trends. Highlight the effects of unfair
competition such as limited information access which affects ITO because reputable
organizations searching for quality services have to rely on search engine optimizations
which might compromise or mislead information.
Slide 13
The installation, business and maintenance of ITO requires an framework system that
captures the legal requirements ( Krutz, & Vines, 2010). Hiring employees in a foreign land
calls for the implementation of laws from the host and external country. This raises
challenges of change management, legal framework,customization, data management, control
conncectivity and diversification.
Slide 14
Common legal challenges in ITO arising from third party involvements includes IP
regulations, missed operational policies, differences in labour laws and systems integration.
Among these is the policy conflicts, changes in business model, national regulations and
ethics. The violation of privacy affects both business and individuals.
Slide 15
Business contracts guide the business operations in ITO. This ensures the success of an
external service. Legal issues comprise of global, regional, national and industry laws.
Slide 16
The ITO legal framework include property rights such as pattents and copyrights. It also
involves dispute resolution and monitoring of the provisions of the contract.
Slide 17
The formation of a contract considers the cost implications, business terms, industry
requirements and the market systems. These determine the framework for legal systems that
enhance performance and reduce risk factors. These are cost factors, organizational, industry
and legal challenges.

Introduction
Liedtka & Ogilvie (2011) enlighten