Assignment 8 ::MIS1::

As a student, you were invited by the Dean of
the Institute of Computing to attend a seminar-workshop on information
systems planning with some of the faculty members. In one of the
sessions, a discussion of outsourcing came up. You have been asked to
present your evaluation about outsourcing the information systems
functions of the school.

Required:

You are to take a position- outsource or in-source and justify your position. (3000words)



hmpt. OUTSOURCING-is subcontracting a service such as product design or manufacturing, to a third-party company.The decision to outsource is often made in the interest of lowering cost or making better use of time and energy costs, redirecting or conserving energy directed at the competencies of a particular business , or to make more efficient use of land, labor, capital, (information) technology and resources.

What is Outsourcing?



Outsourcing began in the early
eighties when organizations started delegating their non-core functions
to an external organization that was specialized in providing a
particular service, function or product. In outsourcing, the external
organization would take on the management of the outsourced function.

Most
organizations choose outsourcing because outsourcing offers a lot of
advantages. When organizations outsource to countries like India, they
benefit from lower costs and high-quality services. Moreover
organizations can concentrate more on core functions once they
outsource their non-core functions. Outsourcing can also help
organizations make better use of their resources, time and
infrastructure.

In outsourcing, the outsourcer and the
outsourcing partner have a greater relationship when compared to the
relationship between a buyer and a seller. In outsourcing, the
outsourcer trusts the outsourcing partner with vital information.
Outsourcing is no longer confined to the outsourcing of IT services.
Outsourcers in the US and UK now outsource financial services,
engineering services, creative services, data entry services and much
more.

Most organizations are opting to outsource because
outsourcing enables organizations to access intellectual capital, focus
on core competencies, shorten the delivery cycle time and reduce costs
significantly. Organizations feel outsourcing is an effective business
strategy to help improve their business.

The Advantages and Disadvantages of Outsourcing



Organizations
who are interested in outsourcing are often curious to know more about
advantages and disadvantages of offshoring. By gaining insight about
both the good and bad of outsourcing, organizations can decide if
outsourcing is right for them. Most organization jump headlong into
outsourcing, without actually finding out if outsourcing is good for
their business. Before outsourcing, ensure that you are aware about the
pros and cons of outsourcing.

The advantages and
disadvantages of outsourcing can help your organization decide if
outsourcing is right for your business. The following is a list of the
advantages and disadvantages of outsourcing:



The Advantages of Outsourcing

• Outsourcing your non-core activities will give you more time to concentrate on your core business processes
  
• Offshoring can give you access to professional, expert and high-quality services
  
• With outsourcing your organization can experience increased efficiency and productivity in non-core business processes
  
• Outsourcing can help you streamline your business operations
  
• Offshore outsourcing can help you save on time, effort, manpower, operating costs and training costs amongst others
  
• Outsourcing can make your organization more flexible to change
  
• You can experience an increased control of your business with outsourcing
  
• Your organization can save on investing in the latest technology, software
  and infrastructure as your outsourcing partner would be investing in
  these
  
• Outsourcing can give you assurance that your
  business processes are being carried out efficiently, proficiently and
  within a fast turnaround time
  
• Offshoring can help your organization save on capital expenditures
  
• By outsourcing, your company can save on management problems as your
  offshore partner will be managing the team who does your work
  
• By outsourcing, you can cater to the new and challenging demands of your customers
  
• Outsourcing can help your organization to free up its cash flow
  
• Sharing your business risks is possible with outsourcing
  
• Outsourcing can give your business a competitive advantage as you will be able to
  increase productivity in all the areas of your business
  
• Outsourcing can help your organization to cut is operational costs to more than half
  
  

If you want your organization to stay ahead of
competition, concentrate on core competencies and make use of the
latest technologies, then outsourcing can help your organization
achieve all this and more. In outsourcing, the advantages of
outsourcing are more than the disadvantages of outsourcing. The pros of
outsourcing have driven more organization to step into offshoring and
experience the benefits that it has to offer.


The Disadvantages of Outsourcing

• At times, it is more cost-effective to conduct a particular business process, rather than outsourcing it
  
• While outsourcing services such as payroll processing services and tax
  preparation services, your outsourcing provider will be able to see
  your company’s confidential information and hence there is a threat to
  security and confidentiality in outsourcing
  
• When you begin to outsource your business processes, you might find it difficult
  to manage the offshore provider when compared to managing processes
  within your organization
  
• Offshoring can create potential redundancies for your organization
  
• In case, your offshore service provider becomes bankrupt or goes out of
  business, your organization will have to immediately move your business
  processes in-house or find another outsourcing provider
  
• The employees in your organization might not like the idea of you
  outsourcing your processes and they might express lack of interest or
  lack of quality at work
  
• Your outsourcing provider might
  not be only providing services for your organization. Since your
  provider might be catering to the needs of several companies, there
  might be not be complete devotion to you and your company
  
• By outsourcing, you might forget to cater to the needs of your valuable
  customers as your focus will be on the business process that is
  outsourced
  
• In outsourcing, you may lose your control over the process that is outsourced
  
• Outsourcing, though cost-effective, might have hidden costs, such as the legal costs
  incurred while signing a contract between companies. You might also
  have to spend a lot of time and effort in getting the contract signed
  
• With outsourcing, your organization might suffer from a lack of customer focus
  
• There can be several disadvantages in outsourcing, such as, renewing
  contracts, misunderstanding of the contract, lack of communication,
  poor quality and delayed services amongst others.
  
  

The disadvantages of offshoring give organizations an
opportunity to think about what they are stepping into. However the
disadvantages of outsourcing are less than the advantages of offshore
outsourcing. When outsourcing, you might not experience any of these
disadvantages of offshoring, if you find a reliable outsourcing
partner. Before outsourcing take the interests of your customers and
employees into consideration and then make an informed decision. If
your organization is genuinely interested in outsourcing, let not the
disadvantages of outsourcing stop you.
What is Insourcing?




The
opposite of outsourcing can be defined as insourcing. When an
organization delegates its work to another entity, which is internal
yet not a part of the organization, it is termed as insourcing. The
internal entity will usually have a specialized team who will be
proficient in the providing the required services. Organizations
sometimes opt for insourcing because it enables them to maintain a
better control of what they outsource. Insourcing has also come to be
defined as transferring work from one organization to another
organization which is located within the same country. Insourcing can
also mean an organization building a new business centre or facility
which would specialize in a particular service or product.

Organizations
involved in production usually opt for insourcing in order to cut down
the cost of labor and taxes amongst others. The trend towards
insourcing has increased since the year 2006. Organizations who have
been dissatisfied with outsourcing have moved towards insourcing. Some
organizations feel that they can have better customer support and
better control over the work outsourced by insourcing their work rather
than outsourcing it. According to recent studies, there is more wok
insourced than outsourced in the U.S and U.K. These countries are
currently the largest outsourcers in the world. The U.S and U.K
outsource and insource work equally.




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http://en.wikipedia.org/wiki/Outsourcing
http://www.outsource2india.com/why_outsource/articles/advantages-disadvantages-outsourcing.asp
http://www.outsource2india.com/why_india/articles/outsourcing-versus-insourcing.asp






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+GodBless+