Offshoring and Outsourcing: The innovation and its impact on electronic Commerce in Organizations

inTrOduCTiOn If you go out to a restaurant, this is outsourcing; somebody else spent the time and energy to provide the meal to you. If you call a company for a loan and get connected to an operator in a call center owned by another company and located in another country, then this is a case of both outsourcing and offshoring. Outsourcing, especially offshoring, of professional services is receiving increasing attention at all levels: business, technical, political, strategic, and economic. Some executives believe that companies can reap major benefits by rendering these services at the most economic prices without the traditional barriers of national and corporate boundaries. At the other extreme, trade unions and unemployed individuals blame many economic woes to offshoring. Offshoring raises many interesting issues from an academic viewpoint. At the strategic level, companies need to delineate alternative models of operation, and to decide on the optimal model for adapting to the changing business environments in which their suppliers, their customers, and their partners operate in geographically dispersed environments. At the organizational level, one needs to research new relationships between suppliers and buyers. At the technical level, one needs to analyze new paradigms for effective collaboration that can mitigate the current overheads involved in geographically dispersed work centers. At the economic level, one needs to do objective analysis of costs and benefits that accrue to the individual worker, to the host environment, to the sponsoring company, to the operating company, and to the concerned states and countries. aBSTraCT