Imagine that you are in charge of developing a fast-growing start-up 's e-commerce presence. Consider your options for building the company 's e-commerce presence in-house with existing staff or outsourcing the entire operation. Decide which strategy you believe is in your firm 's best interest, and justify why you selected that approach.
As an in charge of creating a fast-growing start-up 's e-commerce presence, I will first have to envisage the potential advantages and disadvantages of outsourcing the operation. I have listed out the major gains and losses of outsourcing an e-commerce development project through the below mentioned Diagram
Creating an e-commerce presence is a relatively complex proposition in today 's world. It is critical
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Thus, having a wholesome e-commerce presence requires having specialization in various technologies and practical skill-sets to develop these different systems and integrate them to help the business. It’s a challenging to hire specialized personnel in each such area if we decide to achieve this in-house. However, outsourcing has a distinctive advantage in utilizing the expertise available in the …show more content…
However, this is not the only criteria to decide whether to outsource or not. I feel that generally, it is 20% more expensive to outsource building the e-commerce presence and not to handle it In-house. But, it wouldn 't be wise just to go by the cost as the only factor. If you consider all the long-term advantages of outsourcing that we discussed earlier, it is possible that we may end up paying an ultimate cost to business if we still decide to go with in-house development. I do not want to run the risk of running the project late or ending up having a mediocre e-commerce presence because of lack of ability and knowledge in my existing staff. Also, I feel that my company will miss an opportunity to use the best of the e-commerce technology available on the market today. Clearly, the advantages of outsourcing this process outweigh the disadvantages, and that is the exact reason I have chosen to build my company 's e-commerce presence by outsourcing the process of
Recently outsourcing has been in the news, especially during political election years. It seems to be a phenomenon that is causing much concern among the population. But exactly how is outsourcing effecting both workers and businesses? And is it as big of a problem as politicians describe?
“Present two arguments for and two arguments against a U.S. company offshoring the management of its customer relationships to technical and managerial personnel in a less-developed country.”
It is difficult to determine whether offshore outsourcing has a positive or negative effect on the U.S. economy. It may actually depend on which perspective you take on it. As stated by Hira and Hira (2005), outsourcing in the services sector is a major shift in how the economy operates and will have serious impacts, both positive and negative, on the trajectory of economic growth, distribution of income and the workforce. However, there are many factors to take into account when considering globalization. Companies must familiarize themselves with the various rules and regulations of global business, tariffs, trade agreements and barriers, and decide how to go global; global consistency or local adaptation. All of these issues affect a company’s plan to move forward with offshore outsourcing.
The outsourcing trend continues to eat up the value chain from blue-collar jobs to white collar jobs3. The software industry is experiencing an outsourcing trend to countries such as China and most significantly to India. The proliferation of the Internet has opened easier access to information and collaborative environments. Previously communication costs and access to mind power was limited. The Internet made communication costs virtually free and collaboration with groups around the makes software engineering and collaboration tasks easier. In additional, liberalization of free markets across international lines has made it easier for companies to set up and outsource engineering tasks throughout the world. Business-process and software outsourcing rely on cheaper cost structure as found in East Asia with manufacturing4.
The proponents of contracting out assume that outsourcing in the IT sector is useful in strategic, technological, and economic reasons. (Gonzalez, Gasco & Llopis, 2009) They believe that outsourcing enables an organization to get the same or better services with lower cost. First, strategic advantages enable organizations to refocus on strategic and core functions, and provide flexibility for organizations because organizations need not to concern about routine tasks (Gonzalez, Gasco & Llopis, 2009). OPPGA (1998) also support these strategic advantages. It asserts that outsourcing can provide organizations with great flexibility in personnel and facilities in short-term projects. Outsourcing providers can provide better services for clients since they usually use new and developed technologies. Second, proponents think that outsourcing gives organizations opportunities to access to technology and reduce technological obsolescence without large investments (Gonzalez, Gasco & Llopis, 2009). Lastly, Pros assume that contracting out can save s...
Outsourcing is obtaining goods or services from a foreign supplier in place of going in the country for these things. There are many debated effects of outsourcing on the economy, and there are several pros and cons to this practice. Even though there are many pros, the overall economy of America would be better off with minimal outsourcing.
The next competitive advantage is quality of service. Outsourced environment is quite different than that of the environment in an enterprise. Advertisers are different economic entity with profits at risk. External service provider will make every effort to deliver good quality; good service and everything will apply and will be tested. For example, the usage of the ITIL methodology. Service providers will also provide high output, and perform better output, needs, and change control. Thr...
Outsourcing has been around for many years. In this paper, I will discuss some of the history of outsourcing, the good things about outsourcing, and the bad things about outsourcing. Outsourcing is important because many companies rely on it in order to get many different products and services to their facility on time and in good shape. Outsourcing is a huge part of the business industry today. Any business can be affected by outsourcing.
E-marketing is a fast growing and rapid platform for any form of business. EBay has been highly successful over recent years and this is a perfect example of an online business. The internal and external environments are constantly changing and in order to keep up with these changes, businesses and organisations must make relevant changes, and generate new strategies to keep up with contemporary developments in e-marketing and to also maintain their position in their market in comparison to their competitors.
Shin, N. (2001). Strategies for Competitive Advantage in Electronic Commerce. Journal of Electronic Commerce Research, 2 (4), pp. 164-171.
E-commerce is about two decades old, yet due to its fascinating dimensions, it remains a challenging area for researchers and professionals.
The future of economic competitiveness for most enterprises relies on entrance and active participation in the e-commerce market. An essential problem with e-commerce is that the controls and organization are different for each site. There is no standard way of building t...
The IT strategy for an ecommerce company is not similar to a utility company. For example, the IT strategy for amazon or ebay not similar to that of a power grid company in west coast. IT strategy and budgetary policy is different for Tiffany and United Airlines. Agile leaders constantly think about their IT strategy to ensure IT is in alignment with business strategy of the company. Agile leaders must ensure that knowledge gap is minimal within the organization. By eliminating the knowledge gap, an organization can operate more efficiently and help cut or avoid costs that does not add value to the business. In order to set effective and meaningful IT strategy, leaders should consider designing and architecting an IT organization where IT organizational function, IT architecture and agile development framework are converging well. Another component plays a significant role here which is outsourcing. Agile organization’s decentralized functions along with deeper understanding of applications, software and hardware architecture is advantageous before allocating budget for outsourcing for the agile software development. One way to control IT budget is to ensure IT decisions are business demand driven while demands are well vetted and controlled. Ensure which demands and ideas are quantifiable in terms of value, revenue, efficiency and quality. But at the same time, IT leaders must ensure that
E-business and e-commerce are terms that are sometimes used interchangeably, and sometimes they are used to differentiate one vendor’s product from another. In both cases, the e stands for "electronic networks" and describes the application of electronic network technology - including Internet and electronic data interchange (EDI) - to improve and change business processes (Bartels, 2000)
Consequently, e-business and especially online shopping is crucial for retail stores. They should provide necessary infrastructure for selling their products online. By taking advantage of e-business not only they can get competitive advantage of online shopping, but the...