Global Service Outsourcing And China's Option

With the development of globalization and information technology, Service outsourcing becomes the new form of international industrial transfer, and service outsourcing is now the emphasis of global economic competition. Each country is trying its best to enlarge the scope of service outsourcing, improve the structure, engage in the global division and enhance the competitiveness under the background of fast development of service outsourcing. China, as one of the world's fastest-growing countries, is attracting more international service outsourcing contracts and both the government and the experts are paying their attention to China's service outsourcing.Service outsourcing is a relatively new concept of international trade. At present, there is less theoretical work but more experiences. Generally speaking, service outsourcing is taken as a way of decreasing costs and increasing core competence for multinationals while for the recipient countries service outsourcing can result in higher employment rate and fasten the economic development.In Part one of this paper, we review the history of service outsourcing and divide it into two phases: Information Technology Outsourcing (ITO) and Business Process Outsourcing (BPO), and then get a clear definition of service outsourcing. According to different basis, we classify the service outsourcing.Part two is about the characteristics of service outsourcing. After the analysis on the characteristics we find that service outsourcing can bring about various influences to the developed, developing and least developed countries.Part three pays attention to the activities of service outsourcing mainly carried out by multinationals motivated by both economic and social facts. We compare two methods—Foreign Direct Investment (FDI) and Outsourcing and find that several factors may affect the success of service outsourcing.In order to get more experience in the real business world, we discuss successful cases of service outsourcing in Part four. The cases cover both ITO and BPO, ranging from information technology, finance, human resource, supply chain management to customer service.In the last two parts, we firstly discuss the present conditions of China's service outsourcing, including both the favorable and negative facts. Then, we make a comparison between China and India which is the advanced service outsourcing center. Finally, we put forward some suggestions for both the government and companies.