Week 4 Identify a FAILED prediction of IT outsourcing to forecast, discuss and analyze

The prediction in the initial waves of outsourcing of jobs from the US to other places in the world where productivity and quality is comparable or better, and where costs are just a fraction of US costs, is that such outsourcing will mean the loss of US jobs and an overall detrimental effect on the jobs situation in the country.

In the early goings, the prediction did not seem to hold water, as just simple back office and other menial, low paid work was outsourced. By 2003, however, the consensus was that there was a growing trend towards the outsourcing of higher-value work that threatened college graduates in the US. As the outsourcing momentum grows, the prediction is that the kinds of jobs that will be outsourced will increasingly be those that are higher up the value chain, leading to the general erosion of the chances of US citizens with high qualifications to compete with their foreign counterparts due to cost. This is true for IT outsourcing and IT jobs in the US as well (IDG News Service, 2003).


The reality, however, is that the prediction does not hold up to the facts. Even in 2003, the observation is that the outsourcing of IT work and processes has not generally resulted in the loss of IT jobs at home. In fact the prediction from 2004 onwards is that the number of US IT jobs will grow rather than shrink, and that overall the share of IT outsourced work to total work that is outsourced is very low. Moreover, with the older generation retiring, the prognosis is that there will actually be a shortage of IT labor supply in the US, rather than a shortage of work (IDG News Service, 2003).

The general prediction that the outsourcing of IT work is going to be a bane on the economy likewise does not seem to be true. While it is true that the outsourcing of all kinds of work and processes, including IT, should remain substantial moving forward, the cost savings to the US economy and the shift of work towards higher value-added work should mean that the US economy should in general be better off as a result of it (Drezner, 2004).
References

Drezner, D. (2004). The Outsourcing Bogeyman. Foreign Affairs. Retrieved 7 August 2007 from http://www.foreignaffairs.org/20040501faessay83301/daniel-w-drezner/the-outsourcing-bogeyman.html
IDG News Service (2003). Offshore outsourcing: Little effect on US jobs? Retrieved 7 August 2007 from http://www.itworld.com/Man/2701/031211outsourcing/

Week 5 Identify a Successful prediction of IT to forecast,discuss and analyze

Identifying a "SUCCESSFUL" prediction of IT outsourcing

Outsourcing is the contracting out of a company’s in-house function to a preferred vendor with a high quality level in the particular task area. Outsourcing is one of the fastest growing trends in business. Large- scale organizations (especially for their Internet and Pay-TV divisions) have latched onto outsourcing due to the almost immediate opportunity of savings and quality improvement.

Outsourcing can impact many elements of an organization in a positive or negative manner. Areas such as structure, corporate culture, cost centers and labor have the most tendencies to react to outsourcing developments. Advantages of clearing a structure can give senior management the prospect of re-using and expanding into locations that have been previously outsourced. (Robert A, 2007)


Employees of organizations don’t benefit from outsourcing as they are at a risk with becoming redundant. This occurs as another group outside the organization who have similar skills and competencies that can perform the same tasks replace existing workers. (Straub, 2004)
This treatment of employees can trigger a collapse in confidence and morale from all other employees throughout an organization as they view fellow employees leaving due to job replacements. Therefore in the future lasting employees will feel uncomfortable in an organization that is constantly outsourcing with fears of loosing their job. In order to prevent this morale downgrade management may choose to cross - train redundant employees so they can fit in another suitable position, where it may for expansion or increase labor productivity.
Another aspect that may be impacted by outsourcing is the hierarchical structure. If a certain department is run from outside such as Information Technology, i.e. Hardware and Software is controlled by an outside body, this makes the ‘IT’ division to be removed from the organization and hence its formal structure, hence it will be a doubtful decision to predict about the forecast because things will go beyond your control and your needs may not be identified by an outside body which could affect your business in the long run.




References

Guy Jr., Robert A.; Hill, J. Reginald, 2007, (Information Ages and Technology Management), Vol. 61 Issue 6, p67-72
Ang, Soon; Straub, Detmar W. MIS Quarterly, 2004, Vol. 22 Issue 4, p535-552