ArticlesBase.com - Free Articles Directory
Free Online Articles Directory
21.08.2008 Sign In Register Hello Guest
Email:
Password:
Remember Me 
forgot your password?


IT Outsourcing and Unseen Risks of the Process

Author: Rajput Jitendra Author Ranking Blue | Posted: 23-03-2006 | Comments: 0 | Views: 297 | Rating:  (50) Article Popularity - Green (?) Got a Question? Ask.
Sign Up Now!

The buzz is that it is a win-win situation for both, the clients and the vendors but for that IT Outsourcing and unseen risks of the process must be taken under care very well. Big companies place the burden of maintaining, managing, servicing and upgrading Information Technology operations onto a third party, which in turn helps them in making nice profits through economies of scale. But the recent disaster at WorldCom for Offshore Outsourcing has brought to light questionable accounting exercise at its Information Technology service provider, EDS, and casts uncertainty on the financial planning that have made such overseas agreements viable.

The fact is most such overseas business deals demand high upfront costs for many services like latest equipments, network connectivity and manpower, the preliminary years of an appointment can mean huge losses for the IT service providers. To reduce this problem in Offshore Outsourcing, EDS chose, in the case of its almost $6.5 billion and 11-year contract with a private company, to employ percentage-of-completion accounting system. That let EDS rise rapidly by booking some revenue before it was even billed for the transactions. It also helps it in spreading over many years some of the expenses to set up the IT infrastructure and overall facilities.

Offshore Outsourcing Company

But the recent accounting disgraces bring into question if this method of IT Outsourcing is a perfect way to examine a company's financial performance or some improvements are required? Besides making it complicated to figure out if a particular contract or deal would fetch profit to the company, it places a huge amount of threat at the door of the Offshore Outsourcing Company. And still the question would remain same that can you depend on your overseas service provider?

Another question that arises is how longer it can last? EDS examination pulled out of the bidding on an IT Outsourcing deal for a private company worth almost $1 billion per year, quoting too much challenges in taking over a majority of the clients products service providers back-office operations.

Rate this Article: Current: 0 / 5 stars - 0 vote(s).

Article Source: http://www.articlesbase.com/management-articles/it-outsourcing-and-unseen-risks-of-the-process-19217.html

Print this Article Print article   Email to a Friend Send to friend   Publish this Article on your Website Publish this Article   Send Author Feedback Author feedback  
Submitting articles has become one of the most popular means of generating quality backlinks and targeted traffic to your website. Join us today - It's Free!

Article Comments

Comment on this article Comment on this article
Your Name
Your Email:
Comment Body
Enter Validation Code: Captcha


Related Articles

Rising pay scale may dull India's IT Outsourcing Industry
By: Rajput Jitendra | 30/03/2006 | Business
India, the destination of IT services has gained lots of popularity because of its talents and especially for lower labor cost for overseas development services.

Software Outsourcing India
By: Rakhi Chowdhary | 24/03/2008 | Outsourcing
The prime reason for choosing India, as an offshore development partner in offshore IT Outsourcing business is the availability of enormous pool of educated manpower combined with world-class quality offerings.

Software Outsourcing is replacing In-House services
By: Rajput Jitendra | 17/03/2006 | Business
Current trend in the IT Industry is that most of the IT companies are finding overseas service providers for the development purpose.

Software Development Services at Affordable Rates
By: john | 08/06/2007 | Software
An India based web development companies specialize in customized web application development, rich internet applications, software development services, internet marketing services. They offer creative, robust, professional and business oriented web solutions to customers using latest technologies to give an edge against their competitors and smoothens their industry process.

Four Indicators to Watch When Outsourcing During a Recession
By: Robert | 24/01/2008 | Business
When making decisions about IT offshore outsourcing, the state of the U.S. economy looms large. The effect of exchange rates, interest rates, IT employment levels and even domestic commercial office vacancy rates will affect your onshore, offshore or nearshore strategy.

Software Outsourcing is ending the big time war
By: Rajput Jitendra | 30/03/2006 | Business
Globalization has brought news of peace and serenity among the countries of the world. Software Outsourcing has brought end of wars between the nations,

India Outsourcing Accounting is an Innovative Option
By: Allies Harbor | 31/03/2007 | Business
Accounting outsourcing involves the transfer of financial and other sensitive personal data online and this is one reason why some people are not open to the idea of outsourcing work. In this era of online data theft and identity theft, this is understandable very well.

Medical Transcription
By: Narindra Maity | 14/07/2008 | Software
Medical transcription also known as MT Services, is a process of transcription or converting voice-recorded reports dictated by physicians or healthcare professionals into text format.

Got a Question? Ask.

Ask the community a question about this article:

Q&A Powered by:
Powered by Yedda 

Latest Management Articles

The Quickest Way to Generate Targeted Traffic Through Affiliate Marketing
By: Ravii Kumarr | 21/08/2008
The quickest way to generate targeted traffic and start earning commissions with an affiliate marketing business is to use Google adwords. One doesn't even need a website of their own to make money online using adwords. Traffic can be sent directly to an affiliate link.

The Audit's Results and Report - the True Story, According to the Iso 9001 Standard Requirements
By: Itay Abuhav | 21/08/2008
The internal audit chapter is included under chapter 8.2 - Monitoring and measurement (it's been said before on our web site already). When performing an audit you are monitoring processes. You sample a process and validate that it is done according to prior requirements. Once you stumble upon nonconformity, a process that was performed not according to a requirement, you must mention it in the audit report. But this is not the end of your story.

Internal Audit - the Iso 9001 Standard Requirements for Internal Audits and the Audits Program
By: Itay Abuhav | 21/08/2008
Internal Audit. "What a headache" - that's surely what every employee think to himself when they receives the massage of an internal audit approaching. There is a reason why. They know that someone is coming to poke their deeds...

How Scheduled Overtime Can be Better Managed
By: SteveHyans | 21/08/2008
HourDoc offers superior solutions for scheduled overtime. HourDoc’s scheduled overtime solution takes into account PTO, electronic timesheets and other valuable time and attendance hardware features. Many clients using the HourDoc scheduled overtime solution comment that better managing scheduled overtime helps them save time and money.

Why Managing Scheduled Overtime is Critical
By: SteveHyans | 21/08/2008
HourDoc offers a superior scheduled overtime solution. HourDoc’s scheduled overtime solution takes into account PTO, OT, electronic timesheets and other valuable scheduled overtime features. Many clients using the HourDoc scheduled overtime solution comment that these options help them solve scheduled overtime issues.

Top Ten Success Factors Of Lean Six Sigma - Identifying Success Factors Critical To Deployment, And Evaluating Which Tools Have The Most Impact On Pro
By: Jonathan Aston | 21/08/2008
Identifying success factors critical to deployment, and evaluating which tools have the most impact on projects New research has identified the success factors critical to the success of a lean six sigma deployment, and the ones that make a difference etween partial and complete success. The research also examined tool use in...

How to Have More Fun Running Your Painting Business
By: Patrick E Cavanaugh | 20/08/2008
Everything comes with instructions, why not a painting company? Call it automating your business, any time you can automate a procedure you free up your time. An automated business can run without a manager, you. Can your company run for any length of time without you? Can you take a vacation?

Secrets of Marketing Your Painting Business
By: Patrick E Cavanaugh | 20/08/2008
Where do the jobs come from? How do we get new customers? How do we expand into a new area. How do we market? Do we just throw dollars at everything that is screaming to us, "buy from me, I will send you all the customers you want. Do we take one big burst of advertising to everyone?

More from Rajput Jitendra

Offshore Product Development Boom
By: Rajput Jitendra | 12/08/2006 | Outsourcing
Today's services in offshoring market current fastest growing segments are product development, though small in size. Offshore product development boom is being fuelled by offshore companies across a variety of verticals from aerospace to medical equipment finding to drive more value-added developed software onto their products while cutting costs.

Threats and Opportunities in It Outsourcing for India and China
By: Rajput Jitendra | 12/08/2006 | Outsourcing
India and China may be two great resource pools for many of the world's top Information Technology companies now, but their rapid growth could produce some creditable competitors in a few years.

Analyzing India Software
By: Rajput Jitendra | 21/06/2006 | Outsourcing
There are many number of Multinational companies set up India Software having large and small projects costing nearly multibillion-dollar money when the initial contract is signed up.

Mini-savvy world of Software Development
By: Rajput Jitendra | 16/05/2006 | Information Technology
In Software Development field of Industry, there is increase in the competitive margin.

Planning to reshape the strategies of Software Development
By: Rajput Jitendra | 15/05/2006 | Information Technology
Keeping on giving higher increments and salaries are not going to change the plans and ideas of Software Development.

Extra Horsepower by Software Outsourcing
By: Rajput Jitendra | 11/05/2006 | Software
Software Outsourcing is typically associated with Information Technology, since big giants and banks often turn to outsource their work by offshore vendors to handle their back-office process and Internet delivery functions and with the advantage of cost cutting to live up with the competitive edge.

Offshore Outsourcing may change with Merger Process
By: Rajput Jitendra | 24/04/2006 | Software
According to news Offshore Outsourcing may change with Merger process. It is marked that more and more companies are now in the process of merger and acquisition rather than dealing by the way of Offshore Development.

Information Technology's input on Software Outsourcing
By: Rajput Jitendra | 21/04/2006 | Software
Informations Technology's input on Software Outsourcing suggests that in present global competitive scenario help from the overseas service provider has been one of the most important business processes for most of the IT companies.

Article Categories






Give Feedback

Sign up for our email newsletter

Receive updates, enter your email below