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Outsourcing Issues in outsourcing..

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Presentation on theme: "Outsourcing Issues in outsourcing.."— Presentation transcript:

1 Outsourcing Issues in outsourcing.

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

3 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

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

5 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

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

7 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

8 Outsourcing strategies

9 Outsourcing strategies


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