Question: The cost advantage of outsourcing organizational functions to overseas vendors
The cost advantage of outsourcing organizational functions to overseas vendors — referred to as offshoring — is achieved by leveraging the available technology (satellites and thousands of miles of fiber-optic cable strung across the world’s oceans) combined with lower labor costs in the vendor country. Failure to plan beyond that cost advantage has generated operational problems (e.g., lack of training and poor cultural adaptation) and prompted some organizations, such as Dell Computers, to bring “offshored” call centers back to the United States.
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