Description: Cnet News article related to the hidden risks of outsourcing & especially to overseas locations.  The article focuses thought around the potential loss of intellectual property in outsource arrangements.  Students should be guided to think critically about this risk & ways to minimize it, if that is even possible.  For instance, don’t outsource what can be stolen such as intellectual property.  Instead, outsource things that are routine & that can be automated.

Source: Reed Taussig, Cnet News

Date: 8/24/2005

Link: http://news.cnet.com/The-hidden-risk-in-outsourcing-overseas/2010-1071_3-5842317.html

Discussion Questions:

1. What are the advantages & disadvantages of outsourcing?  Give examples  of successful & unsuccessful situations.

2. Failure rates of outsourcing relationships are:

a. High

b. Low

c. Acceptable

d. Insignificant

3. Shirking occurs when a vendor:

a. develops a strategic application for a client & then uses it for other clients

b. deliberately underperforms while claiming full payment

c. client enters into a long-term contract with a vendor & the vendor changes financial terms d. at some point or overcharges for unanticipated enhancements

e. none of the above

4. Poaching occurs when a vendor:

a. develops a strategic application for a client & then uses it for other clients

b. deliberately underperforms while claiming full payment

c. client enters into a long-term contract with a vendor & the vendor changes financial terms at some point or overcharges for unanticipated enhancements

d. none of the above