Stragetic Outsourcing

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Strategic Outsourcing

The purpose of this paper is to explore the strategic advantages and disadvantages of outsourcing information technology (IT) functions. More importantly, it is to discuss the viability of outsourcing specific strategic functions, such as software development, hardware maintenance and network management, which have been among the most common non-core functions outsourced organizations. In exploring the strategic advantages and disadvantages of IT outsourcing, several sources were used, specifically research by Draft, Kaplan, Porter and other credible researchers on the subject.

Outsourcing of IT Services Making Strategic Sense

According to Yvonne Lederer Antonucci, in her article, "The Pros and Cons of IT Outsourcing", IT outsourcing generally consist of contracting with outside vendors to provide various IT functions. These functions include software development, data entry, application and hardware maintenance and development, data center operations, disaster recovery and network management and operations (Antonucci, 1998). IT vendors, depending upon the organization's needs, can include individual IT professionals, employee leasing companies, IT consulting firms, or full-service IT providers (Antonucci, 1998).

Although there has been considerable debate regarding IT outsourcing, especially among IT and networking managers, studies have shown that outsourcing has become a viable alternative to maintaining costly internal IT functions, and which can result in significant cost savings as well as performance improvements to organizational operations (Kaplan, 2002). This is considered one strategic advantage of IT outsourcing. Other strategic advantages, according to Antonucci, include (1) lower ...

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..., 79(3), 62-78. http://library.gcu.edu:2048/login?url=http://search.ebscohost.com/login.aspx?direct=true&db=bth&AN=4147416&loginpage=Login.asp&site=ehost-live&scope=site

Quinn, J. B., & Hilmer, F. G. (1995). Strategic outsourcing. McKinsey Quarterly, (1), 48-70.

Third-party billing companies offer a menu of services. (1995). Medical Economics 72(12), 44. Retrieved from http://www.questia.com/read/5035765605?title=Third-party%20Billing%20Companies%20Offer%20a%20Menu%20of%20Services

Zupko, K.A. (1995). Hiring a billing service that won't be a headache. Medical Economics 72(12), 41. Retrieved from http://www.questia.com/read/5035765559?title=Hiring%20a%20Billing%20Service%20That%20Won't%20Be%20a%20Headache

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