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Globalization2pt0_13_OffshoringOutsourcing - Mercy for...

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Mercy for Those Realizing Global Opportunities Through Offshoring and Outsourcing Effectively Alexander Martin Alexander Martin is the principal and management consultant of A.T. Kearney’s Strategic IT Practice. He has worked for A.T. Kearney for more than 9 years for large and mid-sized companies on both national and international levels, helping them primarily in the strategic aspects of information technology. His expertise covers a broad range of functions including outsourcing and off shoring. He helped clients in their make-or-buy strategies, outsourcing and off shoring of IT and business processes. In addition, he helped outsourcing and off shoring services providers in optimizing their sales and delivery strategies. Recently, he has supported countries in positioning them globally as service provider loca- tions. Prior to A.T. Kearney, Alexander Martin worked for J.P. Morgan and Daimler. Introduction Globalization is certainly one of the greatest achievements of the human race. Today’s global connectivity and collaboration provide extensive chances for com- panies and every single being. Especially, the proliferation of new technologies like Internet and e-mail, and the arrival of new services like software maintenance and development, have boosted global trade in the last decades. In 2008, the value of global IT service offshoring amounted to ca. USD 30 billion and further growth is still predicted. Leveraging today’s global delivery capabilities provides significant benefits for companies and allows cost savings of up to 40%. Although global sourcing and offshoring is already common practice for many companies not all organizations are using it today. Sooner or later, all companies will have to practice it in order to have a competitive edge. Today it is possible to leverage the world wage gap even for high-skilled jobs. Those who manage the global network successfully will be the prosperous companies of the future and many of them will come from the emerging markets. R. Ijioui et al. (eds.), Globalization 2.0 , DOI 10.1007/978-3-642-01178-8_13, # Springer-Verlag Berlin Heidelberg 2010 157
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The History of Globalization The history of globalization mainly went through three phases (Martin Walker, 2007 ). Its development can be seen as one of the greatest achievements of the human race. Inventions in transportation, communication, and regulations over the years enabled global trade to flourish. Some historians argue that the first true globalization phase came in the nineteenth and early twentieth centuries and ended by the World War I. During these years massive waves of about 40 million Europeans migrated to North America and millions more to South America and Australia. Britain led global trade due to its maritime mastery and by 1914 it was exporting capital equivalent to 9% of its GDP and amassing global securities worth 140% of its own annual economic output. In total, trade accounted for as much as about 10% of global GDP and through world trade cheap food from the Americas and the Ukraine came to Europe,which was exporting its manufactured goods.
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