Chapter 11: Systems Development and Project Management{Comments Off on Chapter 11: Systems Development and Project Management}

by Rupinder A
Outsourcing is an arrangement by which one organization provides a service or services for another organization that chooses not to perform them in-house. In some cases, the entire information technology department in outsourced, including planning and business analysis as well as the installation, management, and servicing of the network and workstations.  Outsourcing can range from a large contract under which a company outsources its entire departments or a small contract where only certain parts of departments are outsourced. There are three different forms of outsourcing: onshore outsourcing, nearshore outsourcing, and offshore outsourcing.

Onshore outsourcing is engaging another company within the same country for services. Nearshore outsourcing is contracting an outsourcing arrangement with a company in a nearby country. Often this country will share a bored with the native country. Offshore outsourcing is using organizations from developing countries to write code and develop systems. In offshore outsourcing the country is geographically far away.

Many large companies in US are outsourcing. Often times this rises issues at home. As we most of us know countries like India are locations of many call centers. Companies outsource for many reasons which include: tapping outside sources of expertise, concentrating resources on core business, reduce head count and related expenses, eliminate the need to reinvest in technology, reduce costs, and better manage the cost of internal processes. Outsourcing has many benefits, such as, increased quality, reduced expenses, and access to advanced technologies. Although outsourcing has many benefits, it can present some challenges, including: difficulties in getting out of a contract, confidentiality, and competitive edge.

Baltzan, P., & Phillips, A. (2009). Business Driven Information System. Boston: McGraw-Hill Irwin. 420-424.