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INB301 > Lecture 5: Sourcing > Flashcards

Lecture 5: Sourcing Flashcards

1
Q

What does it mean to outsource?

A

Organisations outsource parts of business that don’t bring in the money. Business activities that can be altered such as account, hardware, support.

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2
Q

Why do organisations choose to outsource?

A

There are several reasons. Four predominant reasons:

  1. Financial: can be Cheaper
  2. Political
  3. Technical: Improve service quality and capacity
  4. Strategic and Business: generates more revenues
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3
Q

Elaborate more on the Financial aspect of outsourcing.

A

Changing the outsource can financially help by:

  1. Reduce Costs (e.g. provides IS at a lower cost)
  2. Improves cost control
  3. The need to acquire new resources (e.g full time - casual)
  4. Restructure IS budgets (by changing from purchasing a software to renting one). This is called converting capital flows into operating outflows.
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4
Q

Elaborate more on the Strategic and Business aspect of outsourcing.

A

You can change it by:

  1. Start-ups (enable IS startups to establish their IS functions more quickly and cheaply)
  2. Core competencies (by outsourcing non-core competencies).
  3. Reduction and Devolution (reduce headcout or downsizing through outsourcing)
  4. Reduce Uncertainty and increase flexibility ( reduce uncertainty by having third parties manage fluctuations in user demands. Increase general flexibility in the IS function).
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5
Q

What are the technical aspects of outsourcing?

A
  1. Access to new technologies
  2. Access to Technical Talent
  3. Improve technical Service
  4. Focus internal staff on core technical activities
  • cloud- computing
  • stoarage
  • hardware/ software outsource
  • improve techincal service
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6
Q

Give reasons and examples of the Political reasoning to outsource.

A
  1. Enhance credibility (IS managers show their corporate players)
  2. eliminate a troublesome function (poor implementations)
  3. efficient imperative (where local IS services are not perceived to be as efficent as those provided by the market).
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7
Q

What are the 8 contemporary drivers of outsourcing?

A
  1. Improving quality: (customer service)
  2. Driving Innovations: (partnership with technology companies, ability to be innovative)
  3. Forcing Change: (outsource to other organisations)
  4. Improving analytics: (through access to new expertise and technology. big data organised)
  5. Business process improvement: (e.g. LinkedIN, HR)
  6. Consolidating IS Services: ( creating effectiveness at a global level)
  7. Enabling Compliance: (ensure cmpliant with government)
  8. External Benchmarking: (through outsourcing arrangements)
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8
Q

What are the 4 points in the outsourcing spectrum?

A
  1. Delivery Mechanisims
  2. Function/ Service Mix
  3. Relationships
  4. Geographical distance
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9
Q

Define cloud computing.

A

Is a general term for anything that involves delivering hosted services over the internet.

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10
Q

A cloud service has three distinct characteristics that differentiate it from traditional hosting. What are they?

A
  1. It is sold on demand
  2. It is elastic. - an user may have as much or as little as they need at any given time
  3. the service is fully managed by the provider - the consumer needs nothing but a personal computer and internet access.
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11
Q

What does SPI stand for? and what is it?

A

SPI:

S: Software as a System (SaaS)

P: Platform as a Service (PaaS)

I: Infrastructure as a Service (IaaS)

What is it: Delivery mechanisims for cloud computing

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12
Q

SaaS?

A

Software as a Service

It is a software distribution model made available over a network. It allows applications to be hosted and monitored by vendors or service providers.

The advantages:

  • easy administration
  • automatic updates
  • users have same version of software, hence allowing better collaboration and integration of services. e.g. Microsoft 365, SAP
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13
Q

PaaS?

A

Platforms as a Service

It is when clients rent hardware, operating system (OS), storage and network capacity over the internet.

These are rent virtualised servers and associated services for running existing applications or developing and testing new ones. E.g Oracle

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14
Q

IaaS?

A

Infrastructure as a Service

When an organisation supplies its model by outsourcing the equipments used to support operations, including storage, hardware, servers and networking components.

So the service provider owns the equipment and is responsible for housing running and maintaining it. E.g fujitsu, CITEC

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15
Q

What are the 5 phases of the outsourcing process?

A
  1. Stategy
  2. Formulation
  3. Transition
  4. Transfer
  5. Monitoring and Transformation
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16
Q

Explain step one: Strategy phase.

A
  1. Analyse the functions and processes to identify potential outsourcing opportunites
  2. Determine sourcing approaches
  3. Create Preliminary transformation plan
  4. Evaluation and Decision
  5. Prepare Governance plan
17
Q

Explain step two: Formulation phase. (planning phase)

A
  1. Idenitfy criteria for selection of vendors
  2. Identify vendors through the procurement process
  3. Due dilligence, understand and confirm vendors capabilities
  4. Prepare for negotiations by establishing cost and service qualitiy dimensions
  5. Establich preliminary agreements
  6. Preliminary transitions plan
18
Q

Explain step three: Transition phase. (people aspects)

A
  1. Prepare transformation plan
  2. Prepare insourcing Plan
  3. Integration preparation
    1. finalise solution architecture
    2. finalise service architecture
    3. finalise personal strategy
  4. Contracts finalisation and review
19
Q

Explain step four: Transfer phase.

A
  1. Transfer
    1. Services
    2. Resoures
    3. Personnel
    4. Knowledge
  2. Due dilligence review
20
Q

Explain step five: Monitoring and Transformation (after 3 years see if it works or not. Can we alter this?)

A
  1. Service performance
  2. Financial performance
  3. Transformation plan execution
  4. Benefits and Assessment
  5. Governance and Forward Planning
21
Q

Outsourcing Models

A
22
Q

What Could possibly go wrong?

A
  • No legalisatiion with partnered organisations
  • Bankruptcy

INB301 (10 decks)

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