Pros And Cons Of IT Outsourcing
INTRODUCTION TO IS/IT SOURCING
The term “IT sourcing” can signify different things to different firms, it is critical to understand its basic components, because it constitutes one of the largest areas of spend for organizations.
IT sourcing can be classified into IT insourcing and IT outsourcing. Information technology outsourcing is the practice of shifting IT assets, leases, staff, and management accountability for delivery of services from internal IT functions to third-party vendors whereas insourcing is a practice in which the services and functions are performed in-house and achieve the same objectives as in-house.
The figure given below gives an explanation of risks and rewards of IT/IS outsourcing and IT/IS insourcing in a framework which are described in detail in the further portions of this paper.
FIGURE 1: Framework of IT/IS Insourcing and Outsourcing Risks and Rewards
IT INSOURCING
Insourcing also known as in-house is a business practice in which work that would otherwise have been contracted out is performed in house.
Marc J Schniederjan’s defines insourcing as an
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Since IT is their core competency, companies usually require their technical staff to have proper industry training and certifications as well. For an IT company, offshore outsourcing increases access to a ready and skilled workforce at lower costs. This is a very important factor particularly because, in a competitive industry such as IT, steady access to a talented and skilled workforce is critical in generating innovative ideas that improve the company’s competitive advantages. So to access low-cost and well-educated talent, many IT companies are turning to offshore countries. For example, companies such as Cisco Systems, Intel, Motorola, and Microsoft have moved some R&D activities outside the US. (Surveying the Risks and Benefits of IT Outsourcing
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