Introduction To IT Sourcing Essay

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MISM2301:)MANAGEMENT)
INFORMATION)SYSTEMS)
IS Sourcing

In#house)Development)
• A)firm)provides)IS)services)or)develops)IS)in)its)own) in#house)IS)organiza;on.) – This)is)the)“make”)decision.)

• Drivers)that)favor)this)decision:)
– Keep)core)competencies)in#house)
• If)a)company)outsources)a)core)competency,)it)can) lose)control)over)that)competency)or)lose)contact) with)suppliers)who)can)help)it)remain)innova;ve.)
– IS)service)or)product)that)requires)considerable)security) or)confiden;ality.) Outsourcing)
• Purchase)of)a)good)or)service)that)was)previously) provided)internally) • Drivers):)
– Cost)reduc;on))
• Outsourcing)providers)derived)savings)from)economies)of)scale.)
– Centralized)data)centers)
– Preferen;al)contracts)with)suppliers)
– Large)pools)of)technical)exper;se)

– Help)a)company)transi;on)to)new)technologies)
• IS)staff)within)a)single)company)only)have)limited)experience.)
• Outsourcing)providers)generally)offer)access)to)larger)IT)talent)pools)and)more) current)knowledge)of)advancing)technologies.) – Bringing)in)outside)exper;se)can)help)management)focus)more)on) core)ac;vi;es)rather)than)on)IT)issues) Outsourcing)#)Challenges)
• A)degree)of)control)is)surrendered)over)cri;cal) aspects)of)the)enterprise.) – By)turning)over)data)center)opera;ons,)a)company)puts) itself)at)the)mercy)of)an)outsourcing)provider’s)ability)to) manage)this)func;on)effec;vely.)
– A)manager)must)choose)an)outsourcing)provider) carefully)and)nego;ate)terms)that)will)support)an) effec;ve)working)rela;onship.))

• Company)gives)up)any)real)poten;al)to)develop)their) informa;on)technologies)for)compe;;ve)advantage.) – The)outsourcing)provider)becomes)the)primary)owner)of) any)technological)solu;ons)developed,)which)allows)the) outsourcing)provider)to)leverage)the)knowledge)to) benefit)other)clients,)possibly)even)compe;tors)of)the) ini;al)client.)

Outsourcing)–)Challenges)(Cont’d))
• Savings)may)never)be)realized.)
– Increased)volumes)due)to)specified)growth,)soTware) upgrades,)or)new)technologies)not)an;cipated)in)the) contract)may)end)up)cos;ng)a)firm)considerably)more)
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