5.3 Offshoring

Question 1

Define Offshoring

Answer 1

Same concept as outsourcing but services are located outside a country’s boarders

Question 2

What are the risks of offshoring?

Answer 2

Cultural differences
Regulations
Geopolitical risks
Slave / child labour
Reduces domestic jobs (impacts reputation)
Foreign countries have different ‘green’ agendas

Question 3

What are the IS / IT management issues?

Answer 3

Legal issues (e.g. location of servers)
Contracts, SLAs and penalties
Contract review
Benefits vs Drawbacks
Staff (change management)
Processes and policies may need to be rewritten

Question 4

What are the strategic implications?

Answer 4

Without strategy, IS is just an overhead
Strategy can drive IS as much as IS can drive strategy
More sophisticated applications are producing more data than ever, requiring sophisticated IS capability to deliver strategic value
Mass of data provides IS with greater opportunity to drive business strategy

Question 5

What are the SLA factors?

Answer 5

Geographical placement
Organisational structure and management hierarchy
Number and types of different business groups
Differences in services required inter and intra business groups
Frequency of changes

Question 6

What are the SLA features?

Answer 6

Brief service and business critical issue description
Description of communication channels
Service hours
Schedule interruptions
Housekeeping / data security
Agreed service interruptions (e.g. notice to be given)
Customer responsibilities
Complaints procedures
Statement of obligations
Service targets (response times / functionality / disaster recovery)