BPO and Cloud Computing Case Study 1
PROJ 410 Contracts and Procurement
Smith’s Information Services is in the process of implementing a corporate overhead reduction program. This is due in part to the increasing costs of operating and maintaining an in-house data center, as well as flattened sales and reduced profits. For these reasons Smith’s Information Services is looking to outsource the company’s data center to an outside vendor. The increasing overhead costs include personnel costs to operate and maintain the data center’s servers, data center cooling costs, and electrical utility costs required to run the data center. Reducing these overhead costs, by outsourcing the data center, will help Smith’s Information…show more content… There should be no compromise to the company’s business practices or access to the company’s data. Besides personnel costs and utility overhead costs, Smith’s Information Services would be able to reduce the company’s infrastructure which will also help to maximize profits.
Since Smith’s Information Services Company is in the business of processing and analyzing consumer data, the minimum number of vendors to solicit for outsourcing the data center would be three, with a maximum of ten. This would provide not only a fair solicitation process, but also would ensure the company receives the best value for the services provided by the selected vendor. While the goal of the outsourcing is to reduce the company’s soaring overhead costs, simply selecting any cloud computing company based on cost alone would be foolish. Ensuring there are multiple vendors solicited for this service would ensure the company’s costs are reduced while still maximizing profits. Given that personnel costs account for the majority of a company’s overhead costs, followed closely by utilities costs, any vendor solicited should cost less than Smith’s Information Services is currently spending on its employees and utilities. Limiting the number of vendors solicited to ten or less would also ensure a quick evaluation period without the chance of getting mired in minute details between the