Chapter 19- Outsourcing in the 21st century

Outsourcing Projects

 

-Insourcing (in-house-development) is a common approach using the professional expertise within an organization to develop and maintain the organization's information technology systems.

-outsourcing is an arrangement by which one organization provides a service or services for another organization that chooses not to perform them in-house.

-onshore outsourcing is engaging another company within the same country for services.

-nearshore outsourcing is contracting an outsourcing arrangement with a company in a nearby country.

-offshore outsourcing is using organizations from developing countries to write code and develop systems.

 

Outsourcing Benefits

includes:

• increased quality and efficiency
• reduced operating expenses
• outsourcing non-core process
• reduced exposure to risk
• economies of scale, expertise, and best practices
• access to advanced technologies
• increased flexibility
• avoid costly outlay of capital funds
• reduced headcount and associated overhead expense
• reduced time to market for products or services

 
Outsourcing Challenges

includes:

- contract length

• difficulties in getting out of a contract
• problems in foreseeing future needs
• problems in reforming an internal IT department after the contract is finished

-competitive edge

-confidentiality

-scope definition