Sample Thesis Paper
With workers in offshore locations such as India and the Philippines commanding only 10% to 30% of the salaries that U.S. workers earn (with average IT employee costs ranging from $5,800 to $6,500), there is no doubt that savings can be achieved purely from a head-count perspective. However, the greater benefit of outsourcing is the migration from a fixed-cost IT environment to a variable pricing model that allows firms to gain better control over operating costs. There will be a reduced need for software and hardware infrastructure, as well as reduced costs for maintaining and upgrading hardware and software and for training software developers on the latest technologies.
Most firms also underestimate the true cost of hiring an internal employee. Taking an employee with a base salary of $50,000, also have additional costs such as Benefits; medical, dental, administrative costs, Orientation/training. Therefore, the total actual cost of the employee would be close to $78,000 a year — a 56% increase on the initial estimate. Also attempts to pilot or deploy advanced technologies fail because of immature or non-existent infrastructure for support and education — not because of some basic flaw in the technology itself. Outsourcing companies are frequently called upon for piloting and implementing leading-edge technologies. They have developed proven methodologies and best practices to assure success. Clients get where they want to go faster, and avoid the costly scenario of spending significant amounts of time and money only to end up where they started. Outsourcing helps when the organization is incapable of attracting or retaining talent for specialized technologies, especially for innovative uses.