Introduction

Outsourcing is when a company contracts work to a third party. While it has been in the news more recently, it is not a new phenomenon, and has actually been going on since the 1980s (Lowe, 2002). There has been much debate over recent years on whether outsourcing is the right decision for companies, or even on its ethicality. Many industries, such as textile and automotive, have began outsourcing work to countries like China, Taiwan, and India. The industry I will be focusing on is Information Technology.
Since outsourcing first went in to practice a few decades ago, technology was much different than it is today. Just as technology grew, the need for employees grew as well. IT Outsourcing in India is now a $50 billion a year industry (Anonymous, 2010). International Business Machines (IBM), the largest IT firm in the world today, began outsourcing in 1992 when they opened up in India (Lison, 2010). By 2007, the last year they took a “head count”, they had 73,000 in the country of India alone. Today, they are estimated to have 100,000 employees in India (Lison, 2010).
Outsourcing has clearly helped IBM, as it is now the largest IT firm in the world, and still growing. However, people still question the legitimacy of outsourcing’s benefits. Some people believe that outsourcing hurts the local economy, while others simply don’t know whether to trust an employee thousands of miles away. These problems, as well as benefits and possibilities of outsourcing, will be discussed throughout this paper.