Bài giảng Business Driven Technology - Chapter 19 Outsourcing in the 21st Century

CHAPTER 19Outsourcing in the 21st CenturyLearning Outcomes19.1 Describe the advantages and disadvantages of insourcing, outsourcing, and offshore outsourcing19.2 Describe why outsourcing is a critical business decisionOUTSOURCING PROJECTSInsourcing (in-house-development) – a common approach using the professional expertise within an organization to develop and maintain the organization's information technology systems Outsourcing – an arrangement by which one organization provides a service or services for another organization that chooses not to perform them in-houseOUTSOURCING PROJECTSOUTSOURCING PROJECTSReasons companies outsourceOUTSOURCING PROJECTSOnshore outsourcing – engaging another company within the same country for servicesNearshore outsourcing – contracting an outsourcing arrangement with a company in a nearby countryOffshore outsourcing – using organizations from developing countries to write code and develop systemsOUTSOURCING PROJECTSBig selling point for offshore outsourcing “inexpensive good work”OUTSOURCING PROJECTSFactors driving outsourcing growth include:Core competenciesFinancial savingsRapid growthIndustry changesThe InternetGlobalizationOUTSOURCING PROJECTSAccording to PricewaterhouseCoopers “Businesses that outsource are growing faster, larger, and more profitable than those that do not”OUTSOURCING PROJECTSMost organizations outsource their noncore business functions, such as payroll and ITOutsourcing BenefitsOutsourcing benefits include:Increased quality and efficiency Reduced operating expensesOutsourcing non-core processesReduced exposure to riskEconomies of scale, expertise, and best practicesAccess to advanced technologiesIncreased flexibility Avoid costly outlay of capital fundsReduced headcount and associated overhead expenseReduced time to market for products or servicesOutsourcing ChallengesOutsourcing challenges includeContract lengthDifficulties in getting out of a contractProblems in foreseeing future needsProblems in reforming an internal IT department after the contract is finishedCompetitive edgeConfidentialityScope definitionCHAPTER NINETEENOpening Case Study QuestionsWhat are the benefits and risks associated with outsourcing?What are the ethical issues associated with outsourcing government applications?What are the security issues associated with outsourcing government applications?CHAPTER NINETEEN CASEUPS in the Computer Repair BusinessToshiba is handing over its entire laptop repair operation to UPS Supply Chain Solutions, the shippers $2.4 billion logistics outsourcing divisionCHAPTER NINETEEN CASE QUESTIONSDo you think UPS’s entrance into the laptop repair business was a good business decision? Why or why not?Explain why Toshiba decided to outsource its computer repair business to UPSWhat are some advantages UPS can offer Toshiba in the outsourcing arrangement?Explain the advantages of forming an outsourcing relationship with a parcel delivery company such as UPS