Information systems outsourcing is a business strategy which involves the contracting out of processes to other external parties, more experienced in the area. It can be used by any industry looking to gain a competitive advantage.
Outsourcing strategies need to be selected in terms of a company's core and non-core competencies and which would produce more profit should be determined.
Reasons for the growth of outsourcing include globalization, production technology, and changing customer needs.
There are numerous benefits of outsourcing, including cost control, access to skilled workers, strategic focus, financial reasons, improved growth, improved MIS control, access to technology, and management reasons.
The pitfalls of outsourcing include upheaval of personnel, coordination costs, lack of flexibility and control, and encouragement of competition and opportunism.
An example of a successful outsourcing venture is the one between First Fidelity Bank and EDS; while an outsourcing failure occurred for Ryder Truck International.
Outsourcing is likely to continue to grow into the future and impact most global corporations.
If a set of strategies are followed, it is possible to have successful outsourcing relationships and improve a company. A company can grow and prosper and gain a competitive edge in an industry.
RESEARCH HYPOTHESIS STATEMENT Taking into consideration the factors which a company will consider before contracting out its information systems as well as the problems which can arise from outsourcing, is outsourcing a useful business venture which will give a company a significant competitive advantage in an industry? INTRODUCTION Information systems outsourcing, or the contracting out of IS procedures to more specialized firms, is a business strategy which many organizations in a variety of industries see as a beneficial one.
Before a company decides to make the leap into an outsourcing relationship however, it should determine what it considers its core competencies and which of...