IT Industry outsourcing as a whole

by Miguel V
The article I chose to blog about on this last week of class is called “Information Systems; New Reserachon Information Systems from University of Paderborn Summarized” where the author S. Zammermann talks about how the IT industry as whole adapted to the modern portfolio theory to ensure an optimal and full allocation of given software development projects to available sites. The Modern Portfolio Theory has two contributions. First, It provides a conceptual foundation for the application of Modern Portfolio Theory within the scope of global sourcing of software development projects by ITSPs. Second, It is the first to actually apply Modern Portfoilio They using a real world business case. The researchers concluded that using their “model leads to considerably different project allocations to the available delivery centers of our case company as well as to substantially lower costs of sourcing portfolio.”

I like this article because it’s talking about a big issues that is costing us alot of jobs known as Outsourcing. I understand why companies chose to outsource because it is far cheaper to pay someone over seas 1/5 of what you would pay here, but at the cost of quality. At the end of the day what most companies want is to be able to product a high quality product, with high quality support. I believe companies could benefit from paying a little bit more for better quality then for just average quality. This relates to what we talked about when dealing with outsourcing of large data warehouses.

Information systems; new research on information systems from university of parderborn summarized. (2012). Investment Weekly New, , 1001.

4 thoughts on “IT Industry outsourcing as a whole

  • June 3, 2012 at 9:15 pm

    I agree. I believe we are better off if we do not outsource. We are ultimately giving up quality for cost. Not only that, we are costing a lot of jobs for citizens of the U.S. Outsourcing work is definitely cheaper, but the principle of the matter is to help your country first.

  • June 3, 2012 at 9:42 pm

    I think a huge factor that doesn’t seem very much focused upon in the article is the specifics of how much the distance affects quality control – one personal example was working on programs designed by outsourced groups, the coding did not AT ALL match the specifications provided, and I’m sure most of us have had terrible experiences with outsourced Tech support individuals. A lot can be lost in translation, particularly when a company doesn’t have much ability to provide oversight or interact with the people doing the legwork.

  • June 3, 2012 at 10:03 pm

    Outsourcing does indeed affect the quality of a product and service. A company may save in production costs but at the cost of having a mediocre product. I agree with Jonathan, companies should not outsource to other countries, its costing jobs and the reputation of quality goods and services go down the drain.

  • June 3, 2012 at 11:20 pm

    I also think that the problem of outsourcing is the quality control. Although it may be much cheaper, the quality support would be poor. I also agree that having higher quality products with higher quality support in these days could be successful, since many people these days seem to be unsatisfied with the low quality support.

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