OUTSOURCING
PROJECTS
Insourcing (in-house-development) – A common approach using the professional
expertise within an organization to develop and maintain the organization’s
information technology systems
Outsourcing – An
arrangement by which one organization provides a service or services for
another organization that chooses not to perform them in-house
Onshore outsourcing – engaging another company within the same country for services
Near shore outsourcing – contracting an outsourcing arrangement with a company in a nearby country
Offshore outsourcing – using organizations from developing countries to write code and develop
systems
Big selling point for offshore outsourcing “inexpensive
good work”
Factors driving outsourcing growth include;
·
Core competencies-
·
Financial savings
·
Rapid growth
·
Industry changes
·
The Internet
·
Globalization
Most organizations outsource their noncore business
functions
OUTSOURCING
BENEFITS
Outsourcing benefits include;
o Increased quality and efficiency
o Reduced operating expenses
o Outsourcing non-core processes
o Reduced exposure to risk
o Economies of scale, expertise and best
practices
o Access to advanced technologies
o Increased flexibility
o Avoid costly outlay of capital funds
o Reduced headcount and associated overhead
expense
o Reduced time to market for products or
services
OUTSOURCING
CHALLENGES
Outsourcing challenges include;
o Contract
length
1.
Difficulties in getting out of a contract
2.
Problems in foreseeing future needs
3.
Problems in reforming an internal IT
department after the contract is finished
o Competitive
edge
o Confidentiality
o Scope
definition
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