Outsourcing refers to the strategic delegation of these additional tasks to outside resources. With increasing scale and magnitude of a company, it may get difficult and at times also undesirable to carry out every task in-house. The smarter solution to such situations is to focus only on their key strengths and core functions while outsourcing the rest. Outsourcing provides a workable means to resize and downsize the corporate systems, thus making the business flow smoother and simpler. It brings several advantages for the corporations such as improved company focus, access to diverse and world-class professional services, sharing of risks, work-pace enhanced as well as reduction in costs due to the decrease in resource and personnel requirements. Information technology outsourcing (ITO) has been expanding at a rapid pace in countries such as Eastern Europe, Latin America, India, China etc. The commonly outsourced domains in Information Technology include testing of newly developed applications, outsourcing of projects and staff.
However, in the absence of any pre-defined strategy ITO can pose serious threats to the work processes hindering growth and development of the company. Unplanned or haphazard decision making on choosing the ITO partner is one of the most possible reasons that could create such disadvantageous positions. Other reasons that can induce risks in the adoption of outsourcing are loss of managerial monitoring or control, threats pose to the security and confidentiality of the company, added responsibilities of the company outsourcing services and the presence of additional hidden costs. Also the reputation of the company is kept at stake since it becomes responsible and answerable for the services of the other sources. Usually, the vendors outsourcing their IT services handle multiple projects at a given instant of time. In such a situation, the projects in hand may suffer the risk of neglect and even may fall short of quality. This factor is accentuated by the fact that the company neither has the right to exercise mentorship nor the opportunity to assess the work-pattern. If the selection of partner goes wrong, it may lead to extremely adverse circumstances.
Therefore, it can be summarized that ITO can act a wonderful source of carrying out the business processes more effectively saving time and resources for the core business processes. But its effectiveness lies in the ability of the company to identify its exact needs and lay a strategic plan for the long term visions. For an outsourcer too, it is imperative to strategize his activities, evaluate the conditions holistically before committing on the projects and develop the ability to constantly update the skills as per the market standards.
References
Klepper, R. and Jones, W. (1999). Outsourcing Information Technology Systems and
Services. The Business Forum online. Retrieved www.businessforum.com.
“Outsourcing Information Technology Services.” Outsourcing. Retrieved from
http://www.workservice.com
The advantages and disadvantages of outsourcing. Resources. Retrieved from
http://www.flatworldsolutions.com
