Globalization is a broad term that can be used in varied perspectives. It can be defined as global outlook of various nations of the world coming together to join hands more particularly on economy, politics and education. It as well empowers a view for the whole world at large without considering national identity making it to narrow the world by bringing citizens of all nations closer. This paper will also look at the impact of globalization and business outsourcing based on IT.
Globalization has made it easier for people of one nation to communicate with other nations and this has been considered as one of the greatest achievements. One group in one part of the world can influence others of the same nation or different nation in terms of culture, trade, business, ethics and conduct. Without being much affected by time, space and language, the communications takes place in terms of trade and social internet forums. Therefore globalization amalgamates interaction and integration among various groups of people, different organizations as well as governments of different nations. Such communication gets support from information technology, (Chandrasekaran Balakrishnan, 2012). Not only interaction influences individual and their welfare based on traditions, civilization, financial growth and political infrastructure, its effect as well is felt in the environment at large.
Impacts of globalization have been felt by people, companies, technology and projects. These impacts are in terms of;
a) Industrial: Globalization has brought to the surface the production market promoting accessibility of the variety of products from foreign nations thereby creating a large number of customers for itself. Through this, the movement of goods and materials between and within the national boundaries has been made easier.
b) Economic: The freedom of goods and capital that globalization has brought signify that it has made market to be interrelated and therefore in case of any form of economy collapse within a country, others can take over its economy management.c) Information: It has made possible the flow of information from one part of the world to the other and extended it to the remote areas, through wireless communication, satellites or internet. For example information is now passed through television, mobile, faxes, email among many others.
d) Financial: through globalization, the way to procure external financing opportunities has been opened to the borrowers.
e) Competition: Due to globalization, tremendous competition has been created establishing an open place for excelling with skills and quality as skills and goods from across the world can converge within a matter of minutes and compete against each other
f) Political: For example, the supreme power of the United States has come up in the era of globalization for it has establish a strong and wealthy economy. China as well is coming up with a great economic growth thanks to the fast movement of the goods it manufactures enabled by globalization.
g) Cultural: Cross cultural contacts are always due to globalization. It has made better appreciation towards cultural diversity as well as promoting travels and tourism in understanding both parties widely, (Feza Gazetecilik A. ., 2007). Because of this, greater consumer products have been enhanced on top of establishing pseudo-cultural patterns.
e) Ecological: Due to pollution occasioned by globalization and industrialization, it has affected the climate. For example, the gases produced by the industries interfere with the ozone layer and causing irregular weather prediction. The methane produced and other gases alter the physiology of the inhabitants.
Outsourcing information technology can be described as the practice of one company hiring another company to run a section or its entire information technology operations. Generally, business will opt to outsource basic business operations systems, like supply chain, IT network management, legal and human resources, but at the same time keep proprietary systems in-house, like the electronic medical records, engineering or any other systems that seems to be of great importance to the business operations.
When a company wants to outsource, it is important for it to carefully consider the impact of the outsourced company. According to the report by the Gartner Group, 50% of IT outsourcing projects failed simply due to the fact that performance standards and cost savings were not agreed upon early in the process of outsourcing. For the wise business they will always do their homework beforehand, defining the scope of the project carefully, investigating the outsourcing providers, documenting carefully and monitor the project to avoid any possibility of negative outcome, (Diane Chinn, 2012).
When outsourcing therefore it is also important to:
a) Define the scope of the outsourcing project: What makes IT outsourcing to be more successful is careful planning. This can be done through defining the scope of the problem prior to contacting potential service providers. Give description of the work that is to be done in detail, as well as its hardware and software, together with the exact nature of the work which is to be done. The objectives of the outsourcing should be identified and listed down, for instance, sharing risk, reducing cost or providing access to new technologies. It is also important to determine the timeline for the project, such as delivery dates and milestones, quality management standards, acceptance and performance.
b) Outsourcing provider due diligence: This is carefully doing investigation on the outsourcing vendor that has been considered. You should not only talk to the vice president and sales representative, demand to have a talk with the operations people. Inquire about client-satisfaction data as well as checking reference contact information for former and the current. Do comparison to the bidding vendors based on the years of operation and market share. Look at the size of the organization based on the work to be done, because the firm may be too small making it to have no capabilities of handling effectively the work of a large multiple site, (Phil Fersht and Dana Stiffler, 2009).
c) Contract requirements: It should be stated in such a way that if something does not appear within the contract, that means that it is not covered. An outsourcing contract is said to be effective when it has scope of services, performance standards, term of the contract, pricing, operational report requirements and financial. It should include as well program ownership and cover data, limits on liability, regulatory compliance, indemnification, insurance, dispute resolution, termination, performance bonuses and penalties and audit rights and continuity.
d) Control and Quality Management: An IT outsourcing business should be in a position to monitor the services of the vendor. This can be done through regular auditing as well as customer complaints, service disruptions and service level agreement compliance.
Outsourcing also revolves around application service providers (APSs); these are third parties that are managing business applications for companies so that they can concentrate more on the core business. Such applications always include billing, customer service and payroll. The offered software systems by ASP sometimes are Web-based, to make client companies not to host the software and devote resource to maintaining and updating them. Some other companies find outside parties who are capable of handling online order fulfillment instead of renting or building their own warehouse operations, which will always need special expertise for e-commerce. Therefore they get the humble time to concentrate on core competencies such as creating new products and services and marketing.
Outsourcing tends to be part of the important business evolution change. Businesses that have proper outsourced have shown prove the ability to adapt and take advantage of change that is always critical to continued prosperity. They have to be agile in addition to responding to the new and emerging markets while the existing ones are not viable any more. Outsourcing is capable of providing this kind of agility, making the business to be able to bring in new models that put focus on the areas that differentiate them in the market, (Bruce Schneier, 2012). Therefore business will be able to outsource the low-value, high-cost processes to external players that are capable of managing them more cost effectively and efficiently. Apart from acting to be more than a vehicle for cost containment or workload efficiency, outsourcing as well opens the enterprise to expertise, capabilities and new ideas and to greater extent, it establishes a platform for innovation and insight that is capable of transforming the way things are done.
An example can be derived from the impact of the cloud computing, that is thought to be the most recent incarnation of outsourcing. Cloud is changing the way developers build and test new applications through making them to be able to self provision computing resources in a matter of minutes and hours, but not days and weeks. Through giving opportunity for companies to dynamically request IT as well as business services from a virtualized pool and only pay for what has been used, cloud is changing forever on the way capacity planning is done, apart from people's expectation for service delivery. Organizations in a country are also able to use international organizations or any other external body in…