Cmg 578 - It Outsourcing

IT Outsourcing

Jeffery A. Dugmore

CMG/578

January 18th, 2016

Brian Keltch

IT Outsourcing

Many companies outsource for many different reasons. Outsourcing now seems to be the norm, as there are temp agencies, vendors, near-shore, and offshore firms that are ready and willing to step in for a company who needs assistance in their non-core-competencies. When a company needs to decide if they will go with an outsourced vendor, there is no simple answer. However; there are some guiding principles to follow to make the final decision. The main thing to think about when outsourcing is never to outsource a company’s core competencies. By doing this, in a sense, a company will be giving up their control of what they're in business for to somebody else.  Also, it would be smart not to outsource knowledge-based functions that are dependent on company information. Another important aspect to consider is intellectual property content agreements. Other countries do not have the same guidelines when it comes to intellectual properties, having a non-disclosure agreement is important. When considering outsourcing, the primary concern for every company is cost factors. Companies in Asia and Eastern Europe can still provide direct cost reductions of up to 75% (Zwilling, 2011). Before deciding to outsource, an essential thing to do first is to monitor the project, or department first. Watch for areas of discrepancies, or areas where hired staff can not quite handle, or grasp.  Once the decision is made to outsource, keeping somebody within the organization to oversee the outsourcing procedures to ensure everything is in line with company mission and values. The bottom line, outsourcing is an excellent tool, not a problem.

Just like with anything in life, there are risks involved. Outsourcing is the same, it will come with its risk, that need to be weighed out before pursuing the option. One major issue that a company may run into for outsourcing the IT department is the potential downtime, and loss of productivity. Sometimes an outsourced IT vendor may take days before they can commit their time to correcting a downtime issue. Resulting in employees being unproductive in their activities at work. If the IT department is in-house, the downtime can be responded to imminently, in which case the downtime will be less significant. Another thing with outsourcing the IT department is the unfamiliarity that will ensue with a vendor. Having an in-house IT department gives the administrator an intimate feel for the ins and outs of a company's network and systems. Outsourcing this area can and will make this area unfamiliar, and can cost the company more money in the long run. Which is why most managers choose not to outsource this part of their business. Moving on, most technology companies, and companies that have to secure their information need a high-end security system to firewall their classified information. Outsourcing this part of the company can leave a company susceptible to information leaks as companies sometimes have higher and stricter guideline when it comes to security, that outsourced vendors sometimes cannot compare. Since the foreign country may not have laws protecting intellectual property or other private data, businesses may find it difficult to prosecute such illegal activity (Gluck, 2015).