Leveraging IT for Business Assignment Example | Topics and Well Written Essays - 2500 words

Leveraging IT for Business - Assignment Example The benefits of offshoring are numerous to the company that engages in it. These include the reduction of the cost of doing business. Businesses have been able to reduce costs especially on the salaries that it pays out as well as other benefits. This is of benefit to the organization as it enables the organization to continue to function without unnecessary expense added to it (Click and Duening 2005). This is because most of the outsourcing destinations like China, India and other countries offer cheaper labour to these companies that outsource to them. Another benefit of outsourcing is the competitive advantage that it gives to those companies that use it. This is gained both in the local as well as in the international scene. This is due to the lower cost of business operations and the proximity to the available market for the finished goods. On the other hand, the difficulties of outsourcing a business are also present and must be put into consideration. These include the propor tionality of the projects availed and the provider of the BPO to fulfil the obligations. As the size of the provider goes up, so is the risk. At the same time, there is the matter of trust between the provider and recipient. The people or companies that are the recipients of the services that are being outsourced may be unknown. This means that it is a testing venture when a company, for example, far away, Australia decides to entrust its business to a little-known group like in India. The end result may be a poor show of the BPO which may be a great threat to the survival of the company. Another challenge to outsourcing is that it has the capacity to cause brain drain. According to unions within Australia, the outsourcing has driven a number of nationals from Australia to other countries in search of better terms of employment (Switzer 2006). This is because when companies outsource, they reduce the number of local jobs that they have. This is nature of unemployment that drives the job seekers elsewhere to try and survive. Outsourcings will, therefore, cost the country a lot of its highly productive labour.