Thursday 19 March 2015

Outsourcing In The 21st Century ( Chapter 19 )



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 organizations that chooses not to perform them in-house.

  1. Onshore outsourcing - engaging another company within the same country for service.
  2. Nearshore outsourcing - contracting an outsourcing arrangement with a company in a nerby country. Often this country will share a border with a native country
  3. 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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