Outsourcing is the practice of contracting with a third party to provide services or produce goods that would otherwise be performed in-house by the company’s employees. Considering the five fundamental reasons organizations outsource, it is possible to indicate the access to expertise and technologies, cost reduction, client company’s concentration on its operations, improved accountability, and provision of flexibility (Schwalbe, 2018). What concerns the IT sphere, more work is being shifted from the United States to other countries, particularly in IT architecture, software development and maintenance, and process innovations (Schwalbe, 2018). Outsourcing is believed to be a cost-cutting strategy used by businesses to reduce costs.
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Referring to reasons some organizations move their software development work back in-house, it can be stated that most businesses strive to retain IT services running alongside their primary operations. In addition, if companies believe they can outperform their opponents, they will bring software development back in-house in order to obtain additional control. Furthermore, if organizations decide to outsource, they may become overly reliant on their suppliers, and concerns about the careful safeguarding of critical data may arise.
Onshoring is the activity of a company’s production operations being sourced or relocated within its own country’s boundaries. Many corporations outsourced or transferred their manufacturing overseas during globalization to take advantage of lower labor and material prices. Considering the use of onshoring by companies, this process can promote jobs in the United States of America, boost the economy, and allow for lower-cost resources and improved cooperation. What concerns a micro level overview, organizations recognize the opportunity to switch to onshoring as a method to gain control over supply chains, avoid growing international manufacturing costs, and assist national economies in flourishing.
Schwalbe, K. (2018). Information Technology Project Management. Cengage Learning.