Presented By: Ben Barnes Sidney Ellis

Subcontracting a process such as product design or manufacturing to a third-party company

 Redirecting time and energy to core competencies  More efficient use of land, labor, and capital  Takes advantage of information technologies and other resources  Risk Management  Staffing issues/ Larger talent pool  Operational Expertise  Capacity Management

Globalization  Increased Suppliers  India vs. China  BRICM increasing capabilities Person-to-person Offshoring  Smaller scales  Online tutoring, web and software development, writing and translation services

Value of a Dollar  Rupee up 11% vs. U.S. Dollar in 2007  Indexing prices  Currency Hedges Moving from Big Cities  Oversaturation  Shortage of Talent  Second-tier cities

RIM  Offsite management of servers, databases, networks and security  Growing about 20% per year  Smaller Contracts Call Centers  Most mature segment  Huge turnover  “client-centric” solutions

 E-Commerce ◦ electronic funds transfer ◦ supply chain management, orders and shipment information ◦ inventory management ◦ and messaging ◦ Accounting and finance systems

150 senior executives that were interviewed at Fortune 1000 companies, 19% stated that breaking cultural barriers was their second largest concern after loss of operational control. The Problem: Language – 1.2 billion people speak English, but 380 million are native speakers. – Proficiency- written test given vary from actual oral test. Cultural barriers are often silent unlike language. – Norms – Misinterpretations

 Negotiation Styles  “High Context Cultures” (Highly Interdependent, relational) ◦ Maintaining reputation or honor considered vital ◦ Minimizing confrontation or surprises during relationship  “Low Context Cultures” (Factual Oriented) ◦ More open to change ◦ Competition and confrontation  Cause a clash ◦ American considered low context- focus on figures and desire quick conclusions, which may be considered aggressive to someone from high context, which is used to taking time to develop a relationship

 Access, storage and transfer of data  Compliance issues with regulations and U.S. Privacy laws  Most worried problem is:  A lot of firms deal with the same companies overseas. ◦ An employee that is located overseas sells secrets to competitor  U.S. has headed most of this off by signing contracts that are under U.S. Law  During training phases of applications, fake data is used  Due Diligence for customers

 YouTube - ABC News : 20/20 : Myth : Outsourcing Bad for America YouTube - ABC News : 20/20 : Myth : Outsourcing Bad for America