Outsourcing Issues in outsourcing..

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Presentation transcript:

Outsourcing Issues in outsourcing.

Outsourcing What happens in outsourcing? What the reasons for outsourcing? How do you manage an outsourcing agreement?

Outsourcing The purchase of a good or service that was previously provided internally Farm out data center operations (facilities management) Farm out tasks and services Farm out systems development May transfer IS function to vendor

Determinants of Outsourcing Success Core vs. commodity Partner vs. vendor Tight vs. loose contract Success: Economic, Technical, Strategic, Overall Satisfaction with Contract

Primary Reasons for Outsourcing Technological considerations Cost Savings Strategic considerations (infrastructure building - quickly) Human resource considerations Mandated by central office/Acquired by another company Consolidate Data Centers Efficiency Cash Infusion

Aha! Need tight contracts May be successful for core functions… especially if linked to tight contract Can have successful partnerships

Outsourcing Disadvantages Reliance on vendor/partner Loss of control Considerations about security/confidentiality Evaporation of cost savings Loss of competitive advantage Slight of hand with employees

Outsourcing strategies

Outsourcing strategies

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