Chapter 10: Technology Services Procurement

Question 1

What is OSS?

Answer 1

Open Source Software

A software that is distributed with its source code with a supporting license which allows organizations to use the code in their own software.

Question 2

What is the Difference Between Production & Innovation Outsourcing?

Answer 2

Production is concerned with the maintenance and supports of software products that have already been developed. Whereas, innovation is concerned with the development of new applications.

Question 3

What are the Advantages of Outsourcing?

Answer 3

• Enabling a Higher Quality of Service
• Enabling Cost Reduction
• Management is now free to concentrate on its “core operations”

Question 4

What are the Disadvantages of Outsourcing?

Answer 4

• Information Security
• Is the outsource reversible
• Work, labor and the economy (sending jobs abroad).
• Quality of service
• Inadequately documented systems and working practices
• Inadequately documented development requirements

Question 5

What is NASSCOM?

Answer 5

National Association of Software and Services Companies.

Attempts to address fraud concerns by creating the national skills registry.

Question 6

What is Insourcing?

Answer 6

Occurs when a company sets up an operation to carry out work that would otherwise have been contracted out.

Question 7

Advantages of Insourcing Over Outsourcing?

Answer 7

• Provides the opportunity for:
  
  • Economies of scale
  • a COE for the activity being insourced
• Retention of “institutional money”
• Goals and Vision shared with the customer business units.
• Continued employee loyalty/improved career paths.

Question 8

Disadvantages of Insourcing Over Outsourcing?

Answer 8

• Offers more opportunities for radical change to systems etc.
• Senior management may consider the insourced model as a cost Centre.

Question 9

What is Offshoring?

Answer 9

Is defined as the business process done at a company in one country to the same or another company in another.

Question 10

What is Near-Shoring?

Answer 10

Implies the relocation of business processes to lower-cost foreign locations, but in close geographical proximity. I.e. NYC to Montreal.

Question 11

Why Would Near-Shoring be Considered Over Offshoring Despite Being More Expensive?

Answer 11

• If the offshoring country, doesn’t speak the native language well.
• The location involves frequent customer visits.
• Hard to draw lines between operations, so drastic locational change can often be a setback.

Question 12

What is Best-Shoring?

Answer 12

Is that some services need to be delivered in a location close to the customer, while other services do not.

Question 13

What is Friend-Shoring?

Answer 13

Involves outsourcing activities to countries that are friendly with the firms home country.

Question 14

What are the 7 Stages of Vendor Assessment?

Answer 14

1) Form the Project Team
2) Specify Requirements
3) Determine Evaluation Criteria
4) Identify companies and packages
5) Send requirements to potential vendors
6) Evaluate
7) Negotiate and place orders

Question 15

Which Department Selects Technology Vendors?

Answer 15

The Tech Department, alongside other departments.

Question 16

What is RFP? When it comes to Vendors.

Answer 16

Request for Proposal

Will be sent to a list of potential suppliers. It is a statement of intent to purchase, followed by a list of questions covering all of the issues that can be sent to potential vendors.

Question 17

How can Potential Vendors be Identified?

Answer 17

• Internet Searches
• More specialized online directories.
• Advertisements
• Conferences etc.

Question 18

What is an Abbreviated RFP Called?

Answer 18

RPI (Request for information)

These are usually sent when there are a large number of vendors.

The vendor must provide 3 suitable customer references, upon response that can be followed up.

Question 19

What is Factors are Considered When Evaluating Vendors?

Answer 19

• Quality of the answers the RFP questions
• Product demonstrations (using their own data)
• Evaluate the Vendors key people
• Vendors financial status
• Review the contract
• Perform a PoC (Proof of Concept)
• References from other firms

Question 20

Advantages of a Proof of Concept?

Answer 20

Provides greater confidence that the business needs are being met and if there are gaps, they can be addressed.

Question 21

Disadvantages of a Proof of Concept?

Answer 21

Could require a large amount of time for the vendor to produce this information.

Question 22

What is the Point of a Software License?

Answer 22

Grants the customer the right to use the package for a given time period. In return for the fee.

Question 23

What is the Point of a Software Maintenance Contract?

Answer 23

The document obliges the vendor to provide support for the package, in return for payment of a fee.

Question 24

What is the Point of a Development Contract? (Almost final)

Answer 24

This document commits the vendor to develop software specified by the customer, in return for the payment of the fee.

Question 25

What is the Point of a Service Contract?

Answer 25

Describes the work that is to be outsourced to the vendor in return for payment of the fee.

Question 26

Other Names for Work Order?

Answer 26

Task order or change request