Outsourcing

Question 1

Outsourcing involves dimensions and levels

Answer 1

Dimensions
- politcal, cultural, economical

Levels
- society, business, personal

Question 2

IT outsourcing is a strategic social and economic decision (model)

Answer 2

integrative view of IT outsourcing

Question 3

Sourcing decision cycle framework

Answer 3

Make or buy –> outsourcing –> inshoring or offshoring (captive center, farthing, nearshoring)

Question 4

Sourcing scope

Answer 4

• Full outsourcing or partial?

- Multiple vendors or single vendors?

Question 5

Insourcing (pros and cons)

Answer 5

“Make”

Pros

• Keep competencies in-house
• IS service that requires considerable security or confidentiality
• time available in-house to complete IS projects
• Adequate training, experience or skills of in-house IT personnel to provide service or develop software

Cons

• Getting needed IT resources from management
• Finding a reliable competent provider

Question 6

Outsourcing (pros and cons)

Answer 6

Pros

• cost reduction
• new technologies
• outside expertise
• greater capacity on demand

Chalenges

• maintain adequate level of control
• maintain ability to respond to technological innovation
• avoiding a loss of strategic advantage
• avoiding overreliance on outsourcing provider
• Ensuring cost savings
• working effectively with suppliers

Question 7

Avoiding outsourcing pitfalls

Answer 7

• Do not negotiate solely on price
• craft full life-cycle service contracts
• establish short term contracts
• develop skills in contract management
• evaluate the company’s capabilities
• use multiple best of breed suppliers
• choose a supplier whose capabilities complement yours
• cultural fit and technical expertise

Question 8

Captive centers (Four major options)

Answer 8

an overseas subsidiary that is set up to serve the parent company

Hybrid, shared, divest, terminated

Question 9

Captive centers (Four major options)

Answer 9

an overseas subsidiary that is set up to serve the parent company

Hybrid, shared, divest, terminated

Question 10

Backsourcing

Answer 10

Takes back inhouse, previously outsources skills

Question 11

APS outsourcing model

Answer 11

rents out applications to the customers

used to free up IT staff, rapidly deploy new applications and combine data resources

Question 12

The outsourcing life cycle model

+ finale model

Answer 12

4 phases (architect, engage, operate, regenerate)
9 building blocks (investigate, target, strategize, design, select, negotiate, transition, manage, refresh)

Question 13

Outsourcing and partnership

Answer 13

The relationship with the outsourcing company