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Outsourcing

Outsourcing. Issues in outsourcing. Outsourcing. What happens in outsourcing? What the reasons for outsourcing? How do you manage an outsourcing agreement?. Outsourcing. The purchase of a good or service that was previously provided internally

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Outsourcing

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  1. Outsourcing Issues in outsourcing.

  2. Outsourcing • What happens in outsourcing? • What the reasons for outsourcing? • How do you manage an outsourcing agreement?

  3. Outsourcing The purchase of a good or service that was previously provided internally • Farm out data center operations (facilities management) • Farm out tasks and services • Farm out systems development • May transfer IS function to vendor

  4. Determinants of Outsourcing Success • Core vs. commodity • Partner vs. vendor • Tight vs. loose contract • Success: Economic, Technical, Strategic, Overall Satisfaction with Contract

  5. Primary Reasons for Outsourcing • Technological considerations • Cost Savings • Strategic considerations (infrastructure building - quickly) • Human resource considerations • Mandated by central office/Acquired by another company • Consolidate Data Centers • Efficiency • Cash Infusion

  6. Aha! • Need tight contracts • May be successful for core functions… especially if linked to tight contract • Can have successful partnerships

  7. Outsourcing Disadvantages • Reliance on vendor/partner • Loss of control • Considerations about security/confidentiality • Evaporation of cost savings • Loss of competitive advantage • Slight of hand with employees

  8. Outsourcing strategies

  9. Outsourcing strategies

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