Outsourcing may be defined as the transfer of operational responsibility of either business processes or information system and other infrastructure management of an organization to an external service provider to achieve strategic goals, reduce costs, improve customer satisfaction and provide other efficiency and effectiveness improvements. This field has been in constant focus in last few years due to various social and financial issues involved with it.
A number of organizations have sub-contracted all or part of their information systems / information technology function to specialist consultancies / contractors. According to Forbes Over 90% of Fortune 500 companies have outsourced at least one major business function. Encouraged by the projections of phenomenal cost savings, many Fortune 500 firms are jumping on to the "outsourcing bandwagon" (Lacity and Hirschheim 1993b). A survey of U.S. CEOs shows that 42% of communication firms, 40% of computer manufacturers, and 37% of semiconductor companies rely on outsourcing from foreign firms. These same CEOs expect the figures on outsourcing to exceed 50% before the mid-1990s (Bettis et al. 1992).
Though the process of outsourcing is often considered as a non core business process it may range from low grade high volume and repetitive mechanical processes to a more sophisticated and high-tech development outsourcing. Outsourcing, in general, can be categorized as business processing outsourcing, platform IT outsourcing, application outsourcing and systems and network infrastructure outsourcing
Information System outsourcing and processing services spending were approximately $200 billion in 2004, representing an 8.8% compounded annual growth rate (IDC). Information system outsourcing has been fueled by rapid technological change throughout all industries which results in more expense to upgrade systems, more time to install and increase complexity. For smaller companies which have information system and information technology department for just business support, maintaining and managing a good IT/IS department is not viable option, it is practically impossible to have a best team which can take on the market competition but IT/IS is major factor today that decide the success and failure of an organization. This lead to the outsourcing of major IT/IS outsourcings. Entire IT department or some IT/IS services are outsourced. The emerging pervasive nature of the Internet has effectively helped the communication between different parties involved in outsourcing process and has been the major facilitator of outsourcing in recent years. Easy and immediate access to information enables various parties involved in outsourcing to estimate the success of effort and control the entire process flow. Insufficient labor availability in developed countries, especially for those with IT expertise, has also led many companies in developed countries to outsource their business process and functional needs to the countries where cheap and high skilled human resource is available.
Outsourcing decisions, in past, were primarily based on anticipated cost savings without the consideration of technology and security, but in
The outsourcing of information systems and information technology enabled services in United States, Europe and Asia has experienced strong growth over the last several years due to an increasing need to focus on core competencies, heightened ERP and web implementation initiatives, consolidation across industries, insufficient operational expertise and a tight labor pool.
The extent of IS computerization of accounting as well as management tasks covers the managerial function (Leidner & Kayworth, 2008, p. 282). This function needs the exploitation of a competent IS platform for management as well as control of the strategic management of an organisation.
As the result, the organisations are now confronting intense competition due to globalisation of business where customers are no longer bounded to their regional locations and business has become an international entity. In this regard, businesses are now going through the process of transformation from local to international organisations; however, in this process, many factors play a crucial role and it is very imperative that decision-makers in such organisations should consider them to achieve and maintain their organisational success in the market.
As a popular business strategy in the current global business environment, outsourcing was discussed in a holistic manner to justify the inevitable success it brings to business units.
By diversifying, companies expected to protect profits, even though expansion required multiple layers of management.
There have been many reasons for the companies to outsource there is business and some of them are trying to cut costs of IS services, the demand for good quality systems and the inability of the company to establish complex computer systems. The major hurdle in
This research concentrates on outsourcing to India, China, and Pakistan. This research provides a deep insight into the impacts of the outsourcing working paradigm to the economies of different nations (India,
Information technology outsourcing boom began less than a decade ago when many entrepreneurs in countries like Philippines and India introduced these concepts in their respective countries and made their fortunes in the industry. They were able to capitalize cost advantages and maintain high quality through training human resources.
The author provides a brief review of various types of Outsourcing Management Strategies like Selective Outsourcing, Value Added Outsourcing, and Cooperative Outsourcing. Then he gives a brief description of the advantages and disadvantages of Outsourcing Management. Impacts at the Macro and Micro Level are also given in the discussion.
Information usually facilitates analysis and storage of information. Organizations make use of the comprehensive and sophisticated databases to store all the information about the organization (Bak, 2011). The use of information system allows integration of data, its analysis besides making it be convenient.
In addition, organizations outsource their IT functions due to many reasons. For instance, some organizations want to decrease their expenditure by getting rid of the additional burden. The basic purpose of this report is to
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