CIS319: Computers and Information Processing Outsourcing and On-demand Paper

Essay by clwright71University, Bachelor'sA, August 2009

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Foreign outsourcing and information technology plays an important role in increasing the demand for skills, whether the demand for skills is measured as shared employment or the number of relative skilled labor. Outsourcing and on-demand computing have been a familiar exercise among both public and private organizations. These processes are a key component in business strategies. Successful outsourcing for many organizations benefits each company economically and reduces payroll costs as well. Outsourcing for cost reasons occur when supplier's costs are already low enough that even with any added transaction costs, profit or overhead, a supplier can still deliver a service for a lower price.

Having fewer employees requires less infrastructure and support systems (Tukel and Rom, 2006). Much of the research and literature read identified the desire to save costs as an explanation for why outsourcing occurs. The desire to want to save indirect costs due to providing a particular service, the cost savings due to outsourcing and on-demand computing can be quite significant.

On-demand computing is an progressively more accepted project model in which computing means are made available to the user as needed. Resources can be provided by an outside service provider or maintain within the user's enterprise, or made available by a service provider. The on-demand model tackles general technological hurdles and aids an organization to be able to meet fluctuating demands resourcefully. A company's demand on computing sources can change considerably from one problem to another, the desire to preserve adequate systems and meet requirements can be costly. On-demand computing products are rapidly becoming prevalent in the marketplace if an organization cuts costs and maintains minimal technological resources. In a study done regarding basic trends in outsourcing in Canada (Baldwin and Gu, 2008) found that while this leads to some cause for concern about the trend...