I confirm that this is my own work and is the final version. I have acknowledged each use of the words or ideas of another person, whether written or oral.
Business Internal Assessment Proposal and Report
Research question
Should Embassy India outsource its IT services?
The question provides a sufficient platform to analyze Embassy India and determine whether outsourcing its IT services is economically viable for the organization. Embassy India is a middle level organization that specializes in retail operations. The organization’s IT services are currently supported in-house. This research question probes the pros and cons of outsourcing IT services to an external vendor versus an in-house support.
Theoretical framework
Large and small enterprises are often faced with the choice of deciding whether to outsource their IT services versus hosting them in-house. The option of outsourcing IT services lies in an individual organizations priorities as concerned to information technology services.
There are a number of benefits as well as setbacks to outsourcing IT services in Embassy India. Among the benefits the organization will consider include cost savings, expenses control and focus on primary business operations. The prime motive of outsourcing organizations IT services lies in saving money. Outsourcing helps control capital outlay especially in the early stages of operation. Companies that decide to host their IT operations in-house have to factor in the subsequent cost as a fixed cost. Outsourcing will imply that the fixed costs are converted to variable costs, thereby freeing up capital which can be deployed in other areas. Second, outsourcing IT services helps control expenses since the services are better managed by an organization that specializes in IT services. By doing so, some of the costs associated with conducting internal operations within are alleviated giving a business a competitive edge in terms of pricing of goods and services.
Finally, outsourcing IT services will give Embassy Asia an opportunity to concentrate on its core operations fully. Embassy Asia is a retail outlet serving end users and consumers. By outsourcing its IT services, the business can fully concentrate on its retail business and worry less about information technology and associated parameters. Business managers can, therefore, concentrate their energies where their competencies lie.
On the contrary, outsourcing an organization’s IT activities have the potential of presenting some notable risks. These include increased reliability of the business owner on the services of outsiders which may not be satisfactory. The organization may run the risk of downtime during critical system failures, resulting from potential loss of business. Since IT services are outsourced to outsiders regionally or globally, it may take days or weeks before a busy IT contractor can devote satisfactory attention to the prevailing business problem. Likewise, loss of personal touch of IT services and the business is prevalent. Risk of sub-standard security protocols is also imminent.
Methodology
In order to determine the viability of outsourcing IT services of Embassy India, I am going to conduct a research. The research will give an informed opinion of the benefits/risks of the exercise. Using a structured questionnaire, I will obtain data from the management, IT personnel, and employees of Embassy India. From the responses, I am in a position to conduct an analysis of the organization and determine whether it would be financially sound to proceed with the outsourcing plan.
Anticipated difficulties
- Small sample size will affect the final result
- Lack of sufficient time on the part of interviewees to conduct thorough interview
Action plan
The proposal will be conducted in a series of phases. First, I will plan for the project. Interview will take place over a period of 1 week of which the views of the respondents in the organization will be taken. After the interview, I will analyze the data to derive useful insights. Finally, I will recommend the best option for Embassy India in regards to outsourcing IT services or opting for an in-house implementation.
REPORT
ABSTRACT
The competitiveness of an organization in the business world lies in its ability to control costs while at the same time maximizing production and revenue generation. Above all, businesses will gain value and customer loyalty by delivering their business objectives in an efficient and quick manner. Technology has made it possible for organizations to streamline their business operations by outsourcing IT services allowing them to concentrate on their core line of service delivery. This paper explores the benefits of outsourcing IT services of Embassy India. The research will employ the use of structured research method. Specifically, a questionnaire will be used to interview management, IT personnel and other employees. It is found that outsourcing IT services for a medium size company such as Embassy India derives useful benefits. Embassy India lacks the resources and operational know-how to implement state-of-the-art IT systems and services in-house required to keep the business at par with its competitors. Therefore, outsourcing IT services will save on costs, control expenses and accord the organization an amble time to focus on its core activities. It is, thus, recommended that Embassy India outsource its IT services to a regional provider.
INTRODUCTION
Organizations usually struggle with the idea of deciding on the best option for managing their IT services, either deploying in-house IT infrastructure or employing the services of external service providers. Either way, the cost of implementation plays the absolute determinant for each of the choices. IT services are considered a game changer in this 21st century business environment. If an organization lags behind in adopting information technology, it risks being edged out of business. As technology evolves, the same happens with its management. Technological parameters should be managed in an organization to guarantee business value.
Organizations can opt for two ways of managing information technology and allied services. In-house deployment is where the organization invest in infrastructure, human resources and knowledge to deploy, manage, and support information technology aspects within the resides of the organization. This may involve hosting servers and websites in the organization’s premises to support business processes. The requirement for such deployments require huge capital investment to purchase computing devices, resources to hire, train and support staff, resources to upgrade and purchase new technologies as well as miscellaneous cost of utilities such as power, cooling devices and rental space (Böhm 182).
On the other hand, the option for an outsourced service eliminates all the infrastructural necessities as well as the costs associated with them. In order to accommodate an outsourced service, a contractual agreement is necessary between the service provider and the organization seeking the service for a specified amount and period of time. Outsourcing the IT services to a qualified managing company saves the organization huge financial expenses for obtaining infrastructure, hiring and training IT personnel, purchasing, updating and upgrading new technology among other costs. It also saves the company the hassles of providing core business functions while at the same time supporting the infrastructure for delivery. IT services and decisions are always complex, and organizations usually get distracted from them, significantly reducing productivity.
Small and medium organizations such as Embassy India always face the dilemma of lack of systems to support in-house support services offered by large organizations. This way, they are always left of new technological innovations and technology and expertise enjoyed by larger organizations. Through outsourcing, an independent third party manages the cost structure and economy of scale to give the company a competitive edge. In addition, the risks of doing business culminating from new technologies, financial conditions and competitive markets are absorbed by independent service providers. With specific industry knowledge, service providers are more equipped to dealing with risks than an individual entity such as Embassy India.
RESEARCH QUESTION
Should Embassy India outsource its IT services to an external provider?
The question is important to this research because it provides a basis for deciding on the path to take subject to opportunities and risks presented in each case. A research question is an important component of any research work because it gives the research a direction. All the arguments and findings in this research revolve around the research question. The question of whether Embassy India should or should not outsource its IT services frames the project and how it should be handled. It also streamlines the project along the guidelines developed for obtaining an objective.
PROCEDURE
I conducted this research for a period of one month. I allocated a budget of $200 to the research to cover the cost of materials, logistics, and data processing. The first one week went into designing the questionnaire and sending requests to Embassy India.
In the course of the research, I conducted interviews using structured questionnaires to determine the level of support for outsourced IT services over in-house deployment. The questionnaires were filled by the owner of Embassy India, as well as five other employees, two from the IT department and three from other departments.
Apart from the questionnaires, I conducted oral interviews to expound on the content of the responses. I conducted this process after the questionnaires had been sent back to me.
After obtaining the data I analyzed them to derive useful insights which I could use to draw recommendations. All the six respondents responded to the questionnaire and the oral interview.
RESULTS
It is found that the chief executive/owner of Embassy Asia prefer an outsourced IT service over an in-house deployment. The only exception was security of company’s information and the response of the service provider in case of a downtime.
The three employees from other departments (finance and marketing) unanimously preferred an outsourced IT services.
The two employees from IT department differed in their preference for IT management. One supported IT service outsourcing completely while another did not.
ANALYSIS AND DISCUSSION
More than two-third of the respondents are of the opinion that outsourcing IT services of Embassy India is beneficial to the business.
Only one IT staff has reservations about outsourcing the IT services. The said employee has only been in the company for the past year, and as a result does not posses as much experience as the rest.
Discussion
Except one employee who expressly voiced his reservations against the outsourced solution, all the other employees supported the outsourced system. This can be to the fact that the said employee had previously experienced security issues when all the IT services of a company he was working for was outsourced to an external third party. Issues arose due to laxity on the part of the service provider to implement industry approved security solutions. Most of the staff interviewed in this research view outsourcing of the IT services as a solution to the pertinent issue of IT management. It is therefore apparent that outsourcing the IT services will be beneficial to the management of Embassy India in offering cost savings and expenses management as well as improving on labor. Currently, the company has been hosting its IT services in-house. This has necessitated training of new personnel to be conversant with IT every time recruitment is conducted. Training IT staff and other employees cost the business a lot of money of which can be eliminated by employing the services of an industry expert outsider (Bharadwaj 28).
The company has also been struggling with the process of managing data in its computer networks. Customer data is crucial for continued business association and success. However, the lack of an efficient method to manage the numerous amounts of data generated daily presents a challenge to the management. Frankly, the business lacks the financial capacity to roll out industry level management information system. At the same time, it must utilize the customer data in its possession to gain competitive advantage. Management of customer data with regards to security and usability challenges can be countered by involving and external vendor who have vast experience in risk management and cost culture (Baltzan, and Phillips 63).
Managing an in-house IT services has always presented challenges to Embassy India employees and management. No matter how much they train, issues always arose requiring different approaches of solutions. In-house staff leads an isolated existence no matter the level of training and experience. Outsourcing IT services to an expert company which handles multiple scenarios more often is better than a standalone solution. IT management companies leverages the best industry-wide practices and personnel gained over time in the course of their existence. When new technology needs to be introduced, an outsourced solution is faster and efficient. This is because an in-house solution will require selection o qualified staff for the job, training and implementation of the project (Handley, and Benton 29).
CONCLUSION AND RECOMMENDATIONS
Management of IT components in an organization is a crucial practice that requires proper planning and execution. The paper has dealt a research questioning the outsourcing of Embassy India’s IT services. The paper utilized a questionnaire to solicit responses from the interviewees. It was found that over 75% of the staff opted for an outsourced IT solution over an in-house deployment. This, in their view, is expected to save on cost, increase efficiency, reduce risks, focus the business on its core services, and increase productivity. As envisaged, outsourcing IT services will derive immense benefits to the organization.
In view of the discussion, I would like to recommend an outsourced solution to Embassy India. An external service provider will be chosen based on the experience in managing similar projects of the same magnitude. The service provider should be familiar with PCI Compliance standards https://www.pcisecuritystandards.org in order to achieve the best solution. Also, it must offer its services at a competitive price favorable to the organization. Above all, it must treat individual data with utmost care to prevent its confidentiality, integrity and availability. Since the business operations should be up and running each and every single day, IT infrastructure should facilitate production and service delivery. Therefore, uptime is of greater concern. The external provider should be able to achieve an uptime of 99.99% and promptly solve any issue that results in downtime.
Works Cited
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APPENDICES
Questionnaire
Dear respondent,
As a student of Business and Management degree program and writing on a project on whether Embassy India should outsource its IT services to an external provider I seek your valuable opinion. Please help us by taking a few minutes of your time to answer my questionnaire about your personal experience with outsourced IT services and in-house IT services. IT services are a business driver for Embassy India, and the choice of the management option will stand to benefit the business.
Thanks for your anticipated cooperation.
- Which department do you work in? .
The questions only take less than 10 minutes. I kindly appreciate your time and effort to response.
Please answer the following by marking the appropriate box.
- Do you agree of contest the following statements? Choose from a scale of 1 to 5 where 1 represents strongly disagree and 5 represent strongly disagree. Mark the following appropriately.
- Any other information
Thanks once again
