Technology and globalization has enabled organizations to spread to areas and regions which were thought to be out of reach. One of the impacts of globalization is the growth of the outsourcing sector

1. New Age IT Outsourcing - A Move from Traditional to Contemporary
Technology and globalization has enabled organizations to spread to areas and regions which were
thought to be out of reach. One of the impacts of globalization is the growth of the outsourcing sector.
Outsourcing refers to hiring a product or service from outside the walls of the enterprise. In other words,
it is getting external help from an independent firm, an individual or to any other enterprise to perform a
business or function that internal employees might otherwise perform.
Outsourcing of jobs is performed to make use of the expertise, or the high availability factor human
resource or the ability to get the same amount of work done on a lower expense. As globalization
advances, outsourcing jobs to specialized service sectors has grown immensely and the IT sector stands
out as the maximum outsourced one. IT outsourcing includes data center operations, help desk, software
development, software applications services, outsourcing of e-commerce, network security as well as
disaster recovery.
Today's techno savvy organizations in order to make the best use of the technological innovations with
minimum infrastructure investments also tend to outsource datacenter virtualization. This paves way for
the management as well as experts in the organization to focus on core issues, while the external
expertise works to provide the organization with the best of technology. Such operational strategies
besides being cost-effective also help organizations to expand to newer markets.
IT Outsourcing benefits the organizations are with faster and higher-quality service, improved operational
efficiency and nearly 25% reduction in management cost. Besides, outsourcing also facilitates access to
new skills and technology, greater flexibility which facilitates quicker reaction to changing market
conditions and fluctuating demand cycles and increased competition. Further, outsourcing of IT to third
parties makes it feasible for organization to continue enjoying the technological up-gradation without long
term capital investments. The third-party IT service also helps in globalization and operational outreach
by assisting in organizational changes.

2. However, though advantageous, IT outsourcing also challenges the organization with risks of
compromising on quality of service or product, dissatisfied customers, and risks to information security
with the ability of external entities to jeopardize sensitive information, as well as overhead costs.
Nevertheless, these risks can be mitigated by outsourcing between organizations of the same industry
sector as well as making use of the new generation IT sourcing methods.
Further, today’s business environment finds IT moving in as a business enabler, rather than a support
function. Under such circumstances, IT outsourcing needs to move away from the traditional approach as
vastness of the outsourcing requirement restricts control and flexibility of the traditional methods.
Leading service providers thus have worked out total IT outsourcing models based on a collaborative
approach between customer and service provider. Working on the fundamental concepts, the new age IT
outsourcing models provides clients with the flexibility, transparency and a cloud based delivery or
through data centers.
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