Candidate Number: 004438-0045
Research Question:
Should the Embassy India outsource its IT services?
Theoretical framework:
Under the theoretical framework, the research explored the research question with an intention of providing full understanding of information technology. Deeper understanding of the research problem and how to go about it was the key in theoretical framework. With the guidance of research question, understanding outsourcing of information technology and possible consequences were researched. On the in-house, the research suggests that it is the best method for the right technology that will be profitable to the business. The research found out that in-house directly answered the problem of the company unlike the outsourced one that needed to be designed to fit the intended objective. However, it was found that it is expensive and discriminative as only established companies could afford it. It was an area of concern from Embassy India. Through the SWOT analysis, it showed that they have weaknesses in financial resource. The research found that potential service providers were able to provide the exact system demanded by other firms who need outsourced system.
Methodology:
The research intended to achieve what was elaborately discussed. The activities that were necessary to complete the proposal were discussed in the detail. Information technology is more of current issue and therefore primary data was the best method of getting data to analyze.
Anticipated difficulties:
This section is supposed to highlight some of the difficulties that were anticipated in the research and its solutions. The anticipated problem was ranging from failures of the instruments used to collect data and hostile reception by the targeted sample. In this research some of the anticipated difficulties were to get reliable and valid information from the chosen sample. The sample was the employees from Embassy India. There was anticipation that the employees would have developed attitude and that the collected data would fail to reflect the objective result as hinted by SWOT analysis. Having a tailored questionnaire that prevented personal opinions and an interview with CEO solved the problem.
Action plan:
The action plan of the research was to ensure that the research proposal was conducted within the time specified. The action plan covered all the activities from the beginning of the study to recommendation and analysis. Collection of data was done within a short period of time to give sufficient time to analyze the results and give a comprehensive recommendation on the subject of research.
Abstract:
Going by the SWOT analysis of Embassy India, the analysis showed that the company had a weakness in terms of financial resources. The company found it very difficult to keep up with dynamics of information technology. The company had strength in terms of human resources who were innovative and decided to adopt information technology. It was intended to keep the firm at a comprehensive status in the market. The greatest challenge, however was the best method to use when embracing technology, in-house system or outsourcing system. The research found that it was very difficult for the companies especially the smaller ones to choose on whether to have the inner house or outsource IT and the research was meant to help Embassy India to make decision on whether to outsource IT services or not. This paper is divided in various categories. There is the introduction part where the background of the study was discussed. Then procedure part, in the procedure the methods used in the study were discussed and why those methods were recommended for the study. After the procedure there is results. In the result section, the research findings were reported. The results of the six questionnaires issued to the employee and the interview with the CEO was presented. Next is analysis, where the analysis of the research findings was done. The answers by the CEO and the answered questionnaires were analyzed in greater depth. After that was the discussion part. In the discussion, the analysis was used to discuss possible reasons for the results that were found from the questionnaires and the interview. All the answers were discussed. The final part of this paper was the conclusion and recommendations. The discussed ideas in the previous part were used to make a conclusion and the best alternative recommended. The research recommended that the Embassy India would be advantaged if they chose outsourcing over in-house information technology.
Introduction
The research paper intended to find whether it would be right for the Embassy India Company to outsource its information technology or simply in the house type of information technology. Usually, organizations struggle with the idea of deciding on the best option for managing 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. The change is very expensive therefore the businesses run out of the market because they cannot keep up with the cost of updating and changing technology constantly. There are two major ways that technology can be constructed. Way one is the technologies that constructed and assembled by organization. Second way is technology brought from the organizations that sell technology. Managers are there in the business to manage technology parameters. Choosing in-house type of technology and it would mean that organization will have to invest in human resource, infrastructure, the knowledge that will be required to manage and deploy information technology. In the organization technological parameters should be managed to guarantee business value.
Furthermore, organizations could opt for two ways of managing information technology. In-house deployment is where the organization invest in infrastructure, human resources, knowledge to deploy, management, and support information technology aspects within the resides of the organization. It may involve hosting server and websites in the organization premises in order to support business processes. It calls for a huge sum of capital to purchase all the requirements. For such deployments it requires several needs such as huge capital investment to purchase computing devises, resources to upgrade, purchase new technologies, miscellaneous costs of utilities and supporting staff. (Bohm)
The option for an outsourced service eliminates all the infrastructural necessities and the costs associated within. In order to accommodate an outsourced service, a contractual agreement would be necessary between the service provider and the organization, in order to attempt to find the service for a specified amount and period of time. However, outsourcing does not require the infrastructure planted. It means that an organization that decides to outsource its technology will significantly save a lot of money and resources. Outsourcing IT services to a qualified managing company saves the organization huge financial expenses for obtaining infrastructure, hiring, 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. (David)
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. In addition, independent service providers absorb the risk of business culminating from new technology, financial conditions, and competitive markets. Within a specific industry knowledge, service providers are more equipped to dealing with risks than individual entry such as Embassy India. Through the SWOT analysis it has been found that Embassy India is having weaknesses in terms of resources. Therefore, the choice for in-house or outsourcing should be taken seriously. The following research will help Embassy India to take the best decision on whether they should outsource or not.
Research Question
Procedure
Research methods involved collection of primary data by use of questionnaires and interview with CEO. Five questions were addressed to six employees to help obtain the primary data. The questionnaire is designed in five-licker scale. The target were employees of the Embassy India. The CEO of Embassy India was interviewed on the same issue. The interview was a verbal, where the owner was asked five questions. The research used descriptive analysis, quantitative & qualitative analysis of the result obtained with questionnaires. The method used in the analysis chosen because there were only opinions obtained from the questionnaire.
Results
Six questionnaires and an interview schedule with five questions were collected when correctly answered. The result of the retuned interview and questionnaire had results as shown.
The questionnaires that were issued to the six employees of the Embassy India were filled and they were all submitted for the analysis. From the answers in the filled questionnaires, most of the employees wanted to outsource IT services. Five of the employees’ answers showed preference on the outsourcing of the information technology. Most of the answers given by these five employees were in full support either of outsourcing the information technology and very negligible answers were unclear or against. However, one IT staff of Embassy India Company had most of his answers suggesting that in-house is better, than outsourcing. His answers showed negative attitude towards outsourced system. Out of the six employees, only one had contradicting answers from the other five employees. This showed about seventeen percent of the response was negative with over eighty three percent showing similar response on asked questions.
The interview was only given to one person and that was the CEO. All the five questions asked in the interview (appendix x) were answered. From the answers given by the CEO, He showed a preference on the outsourcing information technology over the in-house. From the five questions that CEO was asked, four of them showed the preference to outsourced technology.
Analysis
In the response of CEO Embassy India, the results showed a larger preference on outsourcing IT services. Five answers of the CEO was inclined towards the outsourcing the information technology. One answer that tended to go the opposite way seemed to have not been understood by the CEO properly hence the difference. As the CEO he was for the opinion that the company employee the outsource information technology with strong explanations given in support.
The answers given by five employees showed their understanding on the importance the outsource information technology. The five employees wanted the Embassy India to outsource IT services. Even though five employees suggested outsourced system, one IT staff of Embassy India Company had most of his answers suggesting that in-house is better, than outsourcing. To this employee, the company would better go for the option of in-house information system and not the outsourced system as suggested by the fellow employees. The said employee has only been in the company for the past year, and as a result does not possess as much experience as the rest.
More than two-third of the respondents are of the opinion that outsourcing IT services of Embassy India is beneficial to the business.
Discussion:
Most of the employees wanted an outsourcing the IT services. Except one employee, who expressly voiced his reservations against the outsourced solution. 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 that filled out the questionnaire for this research view outsourcing of the IT services as a solution to the pertinent issue of IT management, therefore apparent that outsourcing the IT services will be beneficial to the management of Embassy India and they offered cost savings and expenses management as well as improving labor. The outsourcing of the technology must have been preferred because of the possible cost saving nature that it has been taking info account the small size of the Embassy India it will be very difficult for the firm to come up with an in-house system. 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.
Also, the company has been struggling with the process of managing data in its computer networks. Customer data is crucial for continued business association. However, the lack of an efficient method to manage the numerous amounts of data generated daily presents to challenge the management. Frankly, the business lacks the financial capacity to roll out industry level management information system. It is clearly shown in the SWOT analysis (appendix x). The company gets concerned about the customer and general management of data. The solution is by use of information technology, which is cheap and affordable by the company and that will be by outsourcing. 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.
In house has been tried by Embassy India in vain, reasons range from a selection of qualified personnel and training of those who will operate the system, all this have proved too expensive for the company. 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. It is because an in-house solution will require selection o qualified staff for the job, training and implementation of the project.
Conclusion and Recommendations:
Management of IT components in an organization is a crucial practice that requires proper planning and execution. Throughout the research the Embassy India employees have been questioned about should it use outsourcing services or not. It was found that over 75% of the staff opted for an outsourced IT solution over an in-house deployment. The Embassy employees point of view is based on the fact that they want to save on costs, increase efficiency, reduce risks, get the business focus on its core services and increase productivity. Outsourcing IT services will have many benefits to the company. Proper management is very important for any kind of technology whether outsourced or in-house. Moreover, with proper management of the outsourced information technology, the company will be able to enjoy a lot.
Recommendation for the research is to the Embassy India COE to embrace outsourced information technology. With the strength of the three IT specialist in the firm as suggested by the SWOT analysis, the company were able to manage the outsourced system properly. The procedure to get the best provider should be on the experience and research on the variety of providers. The experience on managing particular projects can also help in identifying the best provider. The chosen provider expected to have a knowledge on PCI standarts to guarantee the best solution. The price must be competitive and economical to Embassy India Company.
Works Cited
Bohm, Markus. Stefanie, Leimeister. Christoph, Riedl. Hemut, Krmar. ”Cloud Computing- Outsourcing 2.0 or a new Business Model for IT Provisioning?” Join Research. 2011. Web. 23 Dec. 2013.
http://link.springer.com/chapter/10.1007/978-3-8349-6492-2_2#page-1
David, Chou. “Is outsourcing: Its Quality and Risk Issues” Decision Sciences. Michigan University. N.d. Web. 13 Dec. 2013.
http://www.decisionsciences.org/Proceedings/DSI2008/docs/445-5902.pdf
Appendices:
Appendix 1:
Questionnaire
Dear respondent,
I’m a Business and Management student in IB program and I’m conducting a project based on Embassy India and whether it should outsource its IT services to an external provider and it would be important for me to have someone give their opinion about it. I would like to ask you to take few minutes of your time to answer my questionnaire about your personal experience with outsourced IT services and in-house IT services. It would only take about 10 minutes maximum, because IT services are important and needed for Embassy India Company, and the choice of the management option will stand to benefit the business.
Thank you for anticipated cooperation.
Please answer the following by marking the appropriate box.
1. Which department do you work in? .
2. 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 agree. Mark the following appropriately.
Any other relevant information you would like to add
Interview questions for owner of India Embassy Company Jitu Virwani
What do you think about outsourcing over in the house?
Does outsource saves on costs and provides better control?
Does outsourcing IT services reduce risk?
Do you think outsourcing IT services improve efficiency and competitiveness?
Does outsourcing IT services aid in quickly implementing new technology?
