When it comes to accomplishing information technology (IT) task within an organization, there is the option of insourcing, selfsourcing, and outsourcing. Insourcing means to use individuals within the organization to complete the task. Selfsourcing is using system supports by knowledge workers. Outsourcing is when an organization chooses to use third party companies or individuals to complete the task. Organizational IT outsourcing is growing at an exceptional rate. Organizations may seek outsourcing services from individuals throughout the globe. In order to find the best individuals for the task, outsourcing may be an effective solution that could save cost and time by providing resources and capabilities outside of the organizations structure. Outsourced companies or individuals can be used to cut cost, save time, or be used for their extensive background and technical abilities. In addition, outsourcing allows for organizations to potentially acquire leading-edge technology that they would not otherwise have without purchasing and training employees to use the systems. Outsourcing allows for organizations to focus their resources on task that matter most and are their core competencies. Other benefits of outsourcing include, lowering development cost, hiring the best talent for the job, and gaining a higher quality of work.
Short cycle time systems development involves creating and completing task quickly for organizations. A benefit of this type of structure is that new products and innovation are brought to the marketplace sooner and can help organizations benefit by having a competitive advantage. Concerns with outsourcing short cycle time systems include privacy, security, and potential loss of in-house resources. In addition, the quick reaction allows the development of new products and services to align with market and environment changes. A disadvantage of producing products or services quickly is that the quality may suffer. Furthermore, using outsourced individuals, could also present legal issues, financial setbacks, and provide limited control over outcomes.
To try and mitigate the damages of outsourcing, organizations may use service level agreement (SLA) contracts with the vendors, which ensure with penalties that they receive the desired performance and expectations. Other disadvantages of outsourcing include the cultural differences. Outsourcing is often between organizations with different backgrounds, language, and cultural differences. For organizations to outsource effectively, they should implement corporate policy, which protects privacy and data security of individuals. While cost reduction is a valuable benefit to have, organizations should be aware of outsourced individuals who may have hidden cost associated with the work they provide.
Dr. Elijah Clark (May 19, 2015). Information Systems Development [Web log post]. Retrieved from http://elijahclark.com/information-systems-development/