It Outsourcing Essay

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It Outsourcing

INTRODUCTION

Companies are increasingly outsourcing the management of information technology (IT) for reasons that include concern for cost and quality, lagging IT performance, supplier pressure, access to special technical and application skills, and other financial factors. The outsourcing solution is acceptable to large and small firms alike because strategic alliances are now more common and the IT environment is changing rapidly.

REASON TO OUTSOURCE

Although the mix of factors raising the possibility of outsourcing varies widely from one company to another, there are a series of themes that explain most of the pressures to outsource.

First of all, general managers’ concerns about cost and quality drive
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They could spend money on investments that a company couldn’t afford internally. That opens up a lot more avenues to future technologies. An outside vendor would manage the IT function more efficiently.

A vendor’s main competency is managing computer systems. Through their skills, leverage, and economies of scale, they could provide a level of efficiency that could not be achieved at the outsourcer.

Finally, Perhaps most important, outsourcing allow internal IT managers to focus on the development of a new IT infrastructure. Underlying the outsourcing effort is a fundamental strategy to offload legacy applications and operations so a firm could focus on developing new strategic application to support the global business processes, which were being reengineered.

THE PROCESS OF OUTSOURCING

There are many ways to manage IT outsourcing since every company has different culture, strategy, structure, people, and process. Also, many important issues such as structure, Information management operating processes, management processes, human resources management should be clarified.

However, I’m here going to use Xerox’s outsourcing process. A company may go through 5 phases to reach a successful outsourcing; Fact Gathering, Request for Proposal and Data Gathering, Feasibility and management Approval, Baseline Building and Evaluation, Due Diligence and Contract Awarded. At first, information management (IM) collects the facts the company

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