Iowa Case

The case identifies struggle and problem faced by organizations outsourcing IT projects and allows us to ponder on how to manage outsourcing well.

Outsourcing has become an integral part of many organizations today. Outsourcing has its advantages and disadvantages that organizations will have to weigh to decide whether or not outsourcing is the best possible solution to their current problems and business operations. Outsourcing refers to the process of hiring external provider to operate on a business or organization function (Venture Outsource, 2012). In this case, two organizations or businesses enter a contract where there will be an exchange of services and payments. This paper will discuss the possible risks an organization may encounter in outsourcing in relation to the use of an external service

economy. Outsourcing leads to the fragmentation and disintegration of the supply chain, inviting new competitors into the industry, and undermining pricing power and profitability. For instance, is feasible only if it can be separated from other supply chain activities: product development, branding, marketing, distribution, and after sales services. Consequently, the more and more activities outsourced, the supply chain turns from a single integrated process performed within the boundaries of traditional corporations to a fragmented process, performed across several independent subcontractors. Another disadvantage, outsourcing’s unintended consequences extent to company relations with another partner—valued customers. Customers may feel betrayed in each and every activity is outsourced. If I hire Home Depot to make certain improvements in my house because they have reputation to reliable services, I would feel betrayed if I get services from a strangers hired by Home Depot. And I will feel even more betrayed if I end up discussing my medical or financial records with overseas strangers. What seems to be trendy and virtually in business strategy is not always a good

Therefore, outsourcing is challenging for companies because they are several tasks involve in this process. For example: selecting the correct provider of outsourcing, what is the company’s goal, identifying the core and non-core business activities, defining the process that should be keep it in-house or the activities that are better to outsource, to a country that works based on the comparative advantage. Consequently the main propose of outsourcing is to lower costs, and this can cause a direct impact in labor rights.

The business case for outsourcing IT infrastructure most often is anchored in the benefits of gaining expertise external to the enterprise first, despite the commonly-held belief that this strategy is purely for cost reduction. The value of gaining external expertise in critical IT infrastructure processes and

Outsourcing is defined as "the process of purchasing goods and services from outside vendors rather than producing the same goods or providing the same services within the organization." Outsourcing does not come without risks, but it also has its benefits as well. Gaining services or products from outside sources can be very beneficial, considering the alternative that the firm will have to produce them themselves. However, on main risk that is incurred when outsourcing is that when a firm does outsource, they leave the supply of that product or service in the hands of someone of whom they cannot control, contrary to controlling their own supply. Ethical issues are at hand here, as well as trust issues. As you will see in this paper, many different opinions about outsourcing are present among different financial investors and financial officers. Management teams and management leaders are the head personnel that weigh the pro 's and con 's of outsourcing, and this paper will briefly summarize the various opinions, pro 's, con 's, large benefits, and ethical issues dealing with outsourcing.

Various previous studies viewed outsourcing concept and have tried to explain its fact including challenges, risks, motivation, and determinates. Where, the decision of outsourcing is usually seen as logical and rational decision by senior management with prediction to gain various benefits and avoid the expected risks. So, both side of outsourcing should be noticed and taken into considerations when deciding to take any outsourcing decision, below explanation of these opportunities as well as risks associated with IT outsourcing, according to (Kremis, 2006; Mui, 2003; sell et al., 2004):

Outsourcing can provide businesses with flexible, low cost solutions to staffing problems. However, it can also present challenges and complexities, which is why our expert practitioners advise clients seeking to pursue outsourcing arrangements. We have advised a number of companies on the outsourcing of key parts of their businesses, including the outsourcing of IT and other business functions.

Competition and sustainability in the third-party IT contracting industry in the United States are driven by economic factors such as outsourcing, globalization, mergers, and acquisitions (Rose-Anderssen, Baldwin, & Ridgway, 2011). In turn, these factors shape and transform third-party IT contracting companies (Jancikova & Brychta, 2009). IT outsourcing (ITO) is a business solution for reducing production costs (Desar & McGee, 2010). This approach is used frequently in the operation of call centers to provide customer service. For example, in Germany, a labor regulatory framework is used to reduce labor costs in the operation of registered companies (Weinkopf, 2009). Work is outsourced to less developed countries with less-costly

It’s important that Triad assesses the pros and cons involved with outsourcing, such as cost/benefit, potential risks, contractual arrangements and service levels, and necessary controls, before making any changes. We should also define what operations we are considering outsourcing – as opposed to a company-wide reorganization and what other functions we might be able to add as a result of outsourcing MIS IT solutions. While traditional software solutions address the needs of one process, enterprise software, which we might consider for our MIUS needs, addresses multiple “thinking” processes – rather than a simple “tool.”

The assignment research objectives were (a) to gain insight into securing strategic partnerships in the information technology (IT) arena; (b) to understand the choices made to reduce information and security risks by exploring the different outsourcing techniques, and; (c) to understand how business process associated with outsourcing will stimulate awareness on how the process is interlinked with human behaviors. The topics covered include an evaluation of the specifications

Exploring the Internet for outsourcing information consistently leads to the obvious. For example, outsourcing has become a major element of the high-tech startup environment over the past couple of years. There have been (and are) many new high-tech companies trying to convince low-tech companies of the advantages of e-business. Indeed, many high-tech outsourcing marketers touted services to their high-tech peers, proclaiming the advantages of focusing on their high-tech core-business while outsourcing everything else. Of course, much of this was easier to sell prior to September, before security and reliability became a central concern throughout the industry.

A typical example would be the evolution of ERP function to improve financial reporting and transaction processing. Organizations have accepted this IT solution because it helps strengthen several business processes and provide opportunities for growth. However, implementing ERP solutions are somewhat demanding and time consuming, implementation may take several months before completion. Although outsourcing may pose as a best risk-mitigation approach to business solutions, there are also many challenges associated with outsourcing IT solutions. It is critical that before organizations make decisions on whether to outsource a section of their business, they understand the implications such as risks and benefits before going into contracts. The purpose of this paper is to describe outsourcing as it relates to IT solutions. Following the research questions, a background that discusses outsourcing is presented which addresses reasons for outsourcing IT solutions, benefits involved in outsourcing, risks involved in outsourcing IT projects and best practices of outsourcing ERP solutions. Also, a section of this paper discusses outsourcing as it relates to enterprise resource planning (ERP), this is because ERP is considered a big player in IT solutions provision, which have been adopted and implemented in their various IT infrastructure.

The challenges for outsourcing are many as there are two different companies working together. The risk of something going wrong is based on whether the communication between the two is good. Communication is the most important part of the cooperation between the two companies.

This case addresses many issues that affect insourcing/outsourcing decisions. A complex and important topic facing businesses today is whether to produce a component, assembly, or service internally (insourcing), or whether to purchase that same component, assembly, or service from an external supplier (outsourcing).