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Outsourcing

Explore the dynamics of outsourcing, reasons behind it, and how to effectively manage outsourcing agreements. Learn about the determinants of outsourcing success and primary reasons for outsourcing. Discover outsourcing strategies and best practices to maximize benefits and mitigate risks.

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Outsourcing

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  1. Outsourcing Issues in outsourcing.

  2. Outsourcing • What happens in outsourcing? • What the reasons for outsourcing? • How do you manage an outsourcing agreement?

  3. Outsourcing The purchase of a good or service that was previously provided internally • Farm out data center operations (facilities management) • Farm out tasks and services • Farm out systems development • May transfer IS function to vendor

  4. Determinants of Outsourcing Success • Core vs. commodity • Partner vs. vendor • Tight vs. loose contract • Success: Economic, Technical, Strategic, Overall Satisfaction with Contract

  5. Primary Reasons for Outsourcing • Technological considerations • Cost Savings • Strategic considerations (infrastructure building - quickly) • Human resource considerations • Mandated by central office/Acquired by another company • Consolidate Data Centers • Efficiency • Cash Infusion

  6. Aha! • Need tight contracts • May be successful for core functions… especially if linked to tight contract • Can have successful partnerships

  7. Outsourcing Disadvantages • Reliance on vendor/partner • Loss of control • Considerations about security/confidentiality • Evaporation of cost savings • Loss of competitive advantage • Slight of hand with employees

  8. Outsourcing strategies

  9. Outsourcing strategies

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