to retention. However, it is important to recognize that as more and more companies begin to rely on information technology (IT) as a substitute for human workers -- or to require that human workers be comfortable with various IT applications -- outsourcing to companies already having IT capabilities will be more and more commonplace.
As Lanz and Barr (2000) have noted, however, many companies have come to the realization that cost reduction alone is an insufficient reason for outsourcing IT. Sound reasons for outsourcing should include one or more of the following:
A change or expected change in market conditions that increases the need to concentrate management efforts and resources
A well-developed outsourcer market that offers advanced technology, specialized professional expertise, significant capital investments, or innovative solutions and techniques the company cannot match.
The opportunity to shorten cycle times for product development, market delivery, or customer response is another reason advanced for using outsourcers in any market or business sector (Fox & Gruninger, 2002). Hoppe and Smith (2000) further noted that outsourcing -- in many sectors, for different products or processes -- is the new strategy of the current business era; it is a strategy that is seen as reducing costs for specific activities (both capital investment for technology and ongoing human resource costs) while generating profits, realizing economies of scale and scope, and tapping new sources of talent and expertise.
Singh (2003) noted that more and more companies that rely upon IT services are learning to work and work well with outsourcers. While IT solutions -- such as those of British Telecom's call centers -- are increasingly necessary for competitive advantages, they are not inexpensive. In fact, as some experts have noted, IT proficiency and cost management may be the most challenging aspect of the new global economic orde...