Chapter 2 - Literature Review
2.1 Outsourcing / Offshoring
The term Information Technology (IT) has gain popularity in the recent years and the developments made in this sector has transformed the way organizations conduct business. Today, Information Technology has expanded to include many aspects of computing and technology, and the term has become very recognizable.
IT professionals perform a variety of duties that range from installing applications to designing complex computer networks and information databases. A few of the duties that IT professionals perform may include data management, networking, engineering computer hardware, database and software design, as well as the management and administration of entire systems. (Brown & Wilson, 2005)
Outsourcing is the act of obtaining services from an external source. (Brown & Wilson, 2005)
The guiding principle of outsourcing is that non-core and even critical activities of an enterprise could be handed over to companies with lower labor costs and with expertise in those activities, thereby freeing internal resources to focus on enhancing the value-add of its core business.
(Vashistha & Vashista, 2006)
Richard Abel, the founder of approval plans, defines outsourcing as "simply the contracting out of a variety of 'backroom' functions to suppliers in the private sector" (Abel, 1998), but then gives use of Library of Congress printed cards as an example, although LC is clearly not in the "private sector" . Other writers use terminology similar to Baker's: "a method employed by an organisation to hire or contract with an outside individual, vendor, or agency to perform an operation or process rather than using in-house staff to do the same work" (Baker, 1998; Hirshon and Winters, 1996; Dugger, 1997).
Another definition, "accessing expertise and resources from an external organisation to supplement or take full responsibility for a function that was previously accomplished in-house" (Dunkle, 1996; Shirk, 1994), implies that a function never done in-house (such as security) in a particular library would not be so defined, where it would be in another. The American Library Association's Outsourcing Task Force has defined "outsourcing" as "the contracting to external companies or organisations, functions that would otherwise be performed by library employees" (Martin et al., 2000).
Some other definitions seem rather odd, such as the statement "libraries outsource their resources to students and faculty" (McLaren, 1998), or, "in a sense, libraries that use online catalogues have outsourced their card filing" (Hill, J., 1998). But perhaps the oddest definition "contracting out a portion of a library's operation to a commercial entity to realise a cost savings or other benefit that won't occur if the operation is performed in-house" (Milunovich, 2000) suggests it is only "outsourcing" if it works well. (Sweetland, 2001)
Subcontracting and, more generally, productive outsourcing have diffused in all industrialized countries in the last thirty years. Attention to this phenomenon arose in the field of organized vertical markets in which vertical co-ordination by large firms has been progressively substituted by decentralized network of suppliers, governed by principles of lean production and just-in-time. Outsourcing has also been the more significant source of downsizing in local systems of small firms, implying that small firms remain small. The result has been the growth in the informative and strategic interdependency among firms with numerous implications, ranging from the fragmentation of labor markets to the intensified use of information technology. (Innocenti & Labory, 2004)
Organizations in the field of IT turned to outsourcing for a number of reasons and at the same time satisfying a multiplicity of their needs.
According to Ian Hayes, "Whether the goal is to obtain expertise or to reduce costs, to offload application maintenance or helpdesk operations, outsourcing is here to stay. The typical outsourcing agreement will last for a number of years, and be governed by a contract setting the terms and conditions between the client and outsourcer for the duration of their relationship" (Hayes, 2004)
Bibliography
Brown, D., & Wilson, S. (2005). Black Book Of Outsourcing. In D. Brown, & S. Wilson, Black Book Of Outsourcing (p. 18). Wiley.
Hayes, I. S. (2004). Metrics for IT Outsourcing Service Level Agreements. Massachusetts: Clarity Consulting.
Innocenti, A., & Labory, S. (2004). Outsourcing and Information Management, A Comparative Analysis of France, Italy and Japan in both small and large Firms. The European Journal of Comparative Economics , 1.
Sweetland, J. H. (2001). Outsourcing Library Technical Services - What we think we know, and don't know. The Bottom Line:Managing Library Finances , 164.
Vashistha, A., & Vashista, A. (2006). The Offshore Nation. In A. Vashistha, & A. Vashista, The Offshore Nation (p. 45). McGraw-Hill.
