- 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 organizations that chooses not to perform them in-house.
- Onshore outsourcing - engaging another company within the same country for service.
- Nearshore outsourcing - contracting an outsourcing arrangement with a company in a nerby country. Often this country will share a border with a native country
- Offshore outsourcing - using organization from developing countries to write code and develop systems. In offshore outsourcing the country is geographically far away.
OUTSOURCING BENEFITS
The benefits associated with outsourcing include :
- Increased quality and efficiency of a process, service or function
- Reduced operating expenses
- Resources focused on core profit-generating competencies
- Reduced exposure to risks involved with large capital investment
- Access to outsourcing service provider's economies of sales
- Access to outsourcing services provider's expertise and best-in-class practice
- Access to advanced technologies
- Increased flexibility with the ability to respond quickly to changing markets demand
- No costly outlay capital funds
- Reduced head count and associated overhead expense
- Reduce time to market for products or service
OUTSOURCING CHALLENGES
- Contract length
- Competitive edge
- confidentiality
- Scope definition
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