Risks of IT Outsourcing Essay

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IT Outsourcing
The prospect of outsourcing various administrative and business functions may appear worthwhile when comparing vendor costs against the direct costs the company is currently spending. However, there are many additional factors that many companies do not measure that must be taken into consideration when making this choice. The IT Department specifically is one that greatly influences the success or failure of a company. It touches all areas of the business and when operating properly can help propel a business toward success or could cause a business to fail. IT, as a critical business function, will always need some presence within the business to ensure issues are responded to timely, internal IT personnel will be more …show more content…

In house IT personnel, with an established understanding of the company’s culture, can better analyze the company’s needs and ensure that key business functions are not overlooked in the planning and analysis phases of a new system design. Also, for troubleshooting and helpdesk functions, long term employees will likely have an historical perspective of the systems and knowledge of previous issues making them more knowledgeable and better able to respond.
External Dependency Companies are challenged with meeting aggressive goals and objectives that enable them to remain competitive in today’s global market. Placing one of the most critical functions required to achieve those goals in the hands of an external organization is a risk that must be managed very carefully. Should the organization with whom the IT functions are outsourced fail to deliver on services promised, they may be faced with penalties or other provisions agreed to for service failures; however, the company that entrusts their critical functions to them may suffer far greater consequences. Additionally, once the function has been outsourced it may be prove difficult and costly to continue to incorporate additional systems and goals in this area because of the dependency of the external organization. The knowledge and skills that may no longer be available within the company’s ranks may be needed for future projects and to appropriately manage the organizations performing outsourced

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