IT Outsourcing in a Precarious Economic Environment

With the downturn of the global economy, many companies tend to cut expenditures in IT development. This could potentially have a huge impact on IT companies. However, according to the article Infosys Boss: Outsourcing Will Increase, Gopalakrishnan, CEO of Infosys Technologies, is optimistic about the future. Instead of cutting back the workforce, he is looking to seize new opportunities in the IT industry.

Goplakrishnan admits that the impact of the AIG bailout and Lehman's bankruptcy have hindered business and he does not see this as something the economy will overcome quickly. Many of his clients are looking to outsource more of their businesses especially to India. Total IT spending is approximately 800 billion dollars. Of the 800 billion, 250 billion comes from outsourcing, 5% of the 250 billion comes from India.

Infosys Technologies is encouraging more of its clients to implement a global delivery model (GDM). Ninety percent of business comes from within the US and Europe. Infosys hopes to expand business into healthcare and governments sectors.

Many IT companies reduce spending in R&D during periods of economic slowdown. However this company is putting more into development, specifically for IP solutions and value added services. Not only will this give them a competitive edge, it also provides jobs that may otherwise be eliminated.

Source:http://www.businessweek.com/globalbiz/content/nov2008/gb20081121_592979.htm

Critical Success Factors in Agriculture

The text book for this course defines critical success factors (CSFs) as "the things that must go right in order to ensure the organization's survival and success."

An article by Don Hofstrand found in Ag Decision Maker addresses the possible CSFs when transferring the business of a two generation farm. Some of the critical success factors include:

• The parents or older generation must be ready to share with the younger generation. It is often difficult for the first generation to relinquish control to the second generation. Also, the first generation will most likely take an income reduction.


• The second generation must be committed to farming. Sometimes children are inclined to "try it" to please their parents. They must really be committed. Also, one should consider the marital status of the second generation. If he/she is already married then the spouse needs to also be committed to farm life. If the person is single, the fact that a future family member may not like farm life needs to also be a consideration.


• All family members need to have the same vision for the business.


• The business needs to be lucrative enough to support all parties involved.


• Compatibility is also important. The first and second generations need to work well together. They also need to be able to separate personal issues from business issues. When working closely with family members, the lines between personal and business issues can often be blurred.


• Agreements that unfairly favor one family member over another should be avoided.

The article suggests, in the agricultural industry, to establish a trial period of 2-3 years if the parties have not worked together extensively in the past.

Sources:

http://www.extension.iastate.edu/agdm/wholefarm/html/c4-12.html

Turban, Leidner, McLean, Wetherbe. Information Technology for Management Transforming Organizations in the Digital Economy. 6th ed. John Wiley & Sons, 2008.