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An Introduction to the Outsourcing and Offshoring Landscape. Origins of Outsourcing. Roman Empire (approx. 150 B.C.).
Roman Empire (approx. 150 B.C.)
Tax farmers (Publicani) were used to collect taxes from the provincials. Rome, in eliminating its own burden for this process, would put the collection of taxes up for auction every few years. The Publicani would bid for the right to collect in particular regions, and pay the state in advance of this collection. These payments were, in effect, loans to the state and Rome was required to pay interest back to the Publicani. As an offset, the Publicani had the individual responsibility of converting properties and goods collected into coinage, alleviating this hardship from the treasury. In the end, the collectors would keep anything in excess of what they bid plus the interest due from the treasury; with the risk being that they might not collect as much as they originally bid.
Early American History
The production of wagon covers
Was outsourced to Scottish Manufacturers
Who used raw material imported from India
(An organization that designs and distributes, but does not produce anything)
The world’s largest supplier of telecommunications product; manufacturer of none
Katherine M. Hudson
The globalization of outsourcing operating models has resulted in new terms
Every Morning in Africa, a gazelle wakes up.
It knows it must run faster than the fastest lion
or it will be killed.
Every morning a lion wakes up.
It knows it must outrun the slowest gazelle
or it will starve to death.
It doesn’t matter whether you are a lion or a gazelle
When the sun comes up,
YOU BETTER START RUNNING!
* Some of this is taken from Wikipedia – NOT necessarily reliable
“In China today, Bill Gates is Britney Spears.
In America today, Britney Spears is Britney Spears
and that is our problem.”
Loss of Jobs
Loss of Control
Quality of service
Qualifications of outsourcers
Failure to deliver business transformation
Standpoint of labor
* Dibbern, J. and Goles, T. and Hirschheim, R. and Jayatilaka, B. (2004) "Information Systems Outsourcing: A Survey and Analysis of the Literature“ In: The DATA BASE for Advances in Information Systems, Volume 34, Issue Number 4, pp 6-102
Application of Outsourcing Stages
Simon’s Decision Making Model
Phase 1: Decision Process
Guidelines, Procedures, stakeholders of decision initiation, Evaluation
Phase 2: Implementation
Basic IT Outsourcing Life Cycle
Outsourcing Decision Determinant
Application Service Providing (ASP) and Business Process Outsourcing (BSO)
Outsourcing Experiences and Outcomes
Outsourcing Relationships: Arrangement and Management
Offshoring and Global Outsourcing