19.1 Describe
the advantages and disadvantages of
insourcing, outsourcing, and offshore
outsourcing
19.2 Describe
why outsourcing is a critical business
decision
OUTSOURCING
PROJECTS
v Insourcing
(in-house-development) – a
common approach using the professional expertise within an organization to
develop and maintain the organization's information technology systems
v Outsourcing
– an arrangement by which one
organization provides a service or services for another organization that
chooses not to perform them in-house
v Factors driving outsourcing growth
include:
§Core
competencies
•Many companies have recently begun to
consider outsourcing as a means to fuel revenue growth rather than just a
cost-cutting measure.
§Financial
savings
•It is typically cheaper to hire workers
in China and India than similar workers in the United States.
§Rapid
growth
•an organization is able to acquire
best-practices process expertise. This facilitates the design, building,
training, and deployment of business processes or functions.
§Industry
changes
•High levels of reorganization across
industries have increased demand for outsourcing to better focus on core
competencies.
§The
Internet
•The pervasive nature of the Internet as
an effective sales channel has allowed clients to become more comfortable with
outsourcing.
§Globalization
•As markets open worldwide, competition
heats up. Companies may engage outsourcing service providers to deliver
international services
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