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Systems Development The Case For Rejecting Outsourcing Essay

Systems Development The Case for Rejecting Outsourcing the IT Department

The data and information within an organization is its life blood, it was what makes one company differentiated from another and valuable to customers. With IT being at the center of the information engine of any business, the idea of outsourcing it, allowing a third party company to manage this vital aspect of the company's health is like allowing a podiatrist to do heart surgery. It's not going to end well for either the doctor or the patient. The costs and benefits of IT outsourcing are presented in this analysis. Granted, IT outsourcing of menial, low-end tasks shows potential for streaming the operations of a business, allowing it to concentrate on its core business more effectively (Goo, Huang, Hart, 2008). Conversely outsourcing all aspects...

From the many empirical studies of outsourcing, cost reduction is often the secondary benefit (Jae-Nam, Miranda, Yong-Mi, 2004) and often does not materialize at all given the massive amount of coordination and knowledge transfer that has to happen for any outsourcing relationship to be successful (Goo, Huang, Hart, 2008). The cost savings of outsourcing are a mirage; they exist only on one side of the equation of creating greater value for the company hiring outsource providers. The other side of the equation is the massive amount of effort…

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References

Cardella, T. (2003). Executive roundtable. Customer Inter@ction Solutions, 22(3), 16-17.

Goo, J., Huang, C.D., & Hart, P. (2008). A path to successful IT outsourcing: Interaction between service-level agreements and commitment. Decision Sciences, 39(3), 469.

Jae-Nam, L., Miranda, S.M., & Yong-Mi, K. (2004). IT outsourcing strategies: Universalistic, contingency, and configurational explanations of success. Information Systems Research, 15(2), 110-131.
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