This case study is related to the computer glitch that happened in a bank. The Royal Bank of Scotland has caused millions of the customers unable to access their account. This incident happened is caused by a junior technician in India do not have the skills that are efficient in carrying out a given job. In that case, unions have already blamed the fiasco. That is because the fiasco make the decision to outsource much of the company’s IT jobs, as Indian staff are paid little compared with their British counterparts. Improved Business Processes The competitive advantage that can be gained by the companies through IS/IT outsourcing is Improved business processes. IT outsourcing an identification method and rigor of IT resources that can help the business run smoothly. It can control the development of the project budget and expenditures. It also can promote information technology investment proposals from outside and provide skilled individuals in managing IT resources available in the company. Through these companies are able to provide appropriate information and report to the company. This can give competitive advantage to the company. For example, expenditures, progress, and issues the company can be viewed and controlled. Quality of Service The next competitive advantage is quality of service. Outsourced environment is quite different than that of the environment in an enterprise. Advertisers are different economic entity with profits at risk. External service provider will make every effort to deliver good quality; good service and everything will apply and will be tested. For example, the usage of the ITIL methodology. Service providers will also provide high output, and perform better output, needs, and change control. Thr... ... middle of paper ... ... they will ensure that every individual who is hired trained in scientific methods and consistent. Then, with the expertise and skills they will be able to do their jobs well. Lack of staff who is experts in the field of IT in an organization will be able to be solved through IT outsourcing. 1) JOURNAL • Rob Aalders, (2001), IT Outsourcing Making IT work, available from www.fujitsu.com 2) INTERNET • Available from http://operationstech.about.com/od/officestaffingandmanagem/a/OutSrcAdvantg.htm • Available from http://smallbusiness.chron.com • Available from http://sloanreview.mit.edu/article/the-risks-of-outsourcing-it/ • Available from http://webcache.googleusercontent.com/search?q=cache:zFYvtOzbATYJ:https://www.uop.edu.jo/download/research/members/Protect-Your-Computer.pdf+&cd=6&hl=en&ct=clnk • Available from http://searchcio.techtarget.com/definition/outsourcing
The proponents of contracting out assume that outsourcing in the IT sector is useful in strategic, technological, and economic reasons. (Gonzalez, Gasco & Llopis, 2009) They believe that outsourcing enables an organization to get the same or better services with lower cost. First, strategic advantages enable organizations to refocus on strategic and core functions, and provide flexibility for organizations because organizations need not to concern about routine tasks (Gonzalez, Gasco & Llopis, 2009). OPPGA (1998) also support these strategic advantages. It asserts that outsourcing can provide organizations with great flexibility in personnel and facilities in short-term projects. Outsourcing providers can provide better services for clients since they usually use new and developed technologies. Second, proponents think that outsourcing gives organizations opportunities to access to technology and reduce technological obsolescence without large investments (Gonzalez, Gasco & Llopis, 2009). Lastly, Pros assume that contracting out can save s...
The main problem, in this case, is involving Vermont Teddy Bear which was John Sortino in 1981 is that the companies point of sale system was severely lagging behind. In 2011, The company struggled with major surges in customer periods, for example, Valentine's day and Christmas Eve this occurred because of VTB's intricate middleware system. The issue may have happened because instead of revamping it's system during down periods the company attempted to do patch work jobs over time. This is quite alarming because a major retailer would not have these types of issues with the system when they need it most. Which leads to the next point of the IT supervisor being faced with a dilemma on what to improve prior to the next surge period(Mother's
The industry has loyal customers with broad customer base that lowers the collective bargaining power of buyers to medium. The switching cost is very low and thus the customers can turn to a service provider who provide faster and innovative service but this is overcome by customized services and integrating into their customer supply chain.
Companies outsourcing can take advantage of the service provider’s capabilities and innovative competencies, which may be impossible to develop in-house. For example, if a company outsources its IT solutions to a service provider in India, the service provider will give access to the company for its software solutions and data warehouses, which would be very hard to replicate on their own.
Other researchers have identified several outsourcing issues, trends and strategies that companies take in establishing and effectively managing their outsourcing activities (Sinderman 1995; Carney 1997). The trend is for outsourcing relationships to function more as partnerships. Outsourcing providers are taking increasing responsibility in realms that have traditionally remained in-house, such as corporate strategy, information management, business investment, and internal quality initiatives (Sinderman 1995; Carne...
To sum up, Union Carbide handled the crisis cleverly but not well enough because it knew what would the India government and court react to this incident. Union Carbide controlled the whole situation and took lead of the lawsuits itself. The India government and court didn¡¦t help those victims as much as they needed instead. The function of government, designed to protect its people, disappeared in this case.
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).
There is always a huge financial savings upon outsourcing. You don’t need to spend your time and money on resources tools, technology or infrastructure. These reinforcements are pre-arranged and applied to your project by your outsourced partner. After comparing between your in-house team and outsourced team, it is clear that outsourcing or offshoring will cost you much less.
In the late 1980's the rise of India outsourcing had its start. During this phase, India provided skilled contract workers for the US. Efforts to outsource projects to India arose in the late 1990's. This was driven by a combination of rapidly changing technologies and shrinking IT budgets Little by little the small offshore development projects started to multiply. In the beginning it was trial and error because there wasn't much focus on a repeatable and process driven model. During this time offshore outsourcing led to several failures. The big outsourcing force during the late 1990's came with Y2K. Work needed to get done quick and outsourcing to Indian companies was a solution to this. Indian companies had the ability to scale rapidly.
Outsourcing is a technique for companies to reassign specific responsibilities to external entities. There are several motivations for outsourcing including organizational, improvement, cost, and revenue advantages (Ghodeswar & Vaidyanathan, 2008).
...urcing services, the company operation will be became a mess. This is because one organization can’t run a lot of task or project at one time. Therefore an organization need outsourcing in the way to help their organization run smoothly.
Outsourcing allows companies to focus on their core business and can create a competitive advantage by reducing their operational costs. Outsourcing is that companies can outsource the entire function or just part of the function. For example a company can outsource the network management oversight of IT system but keep the end user support in house, this can provide the companies with a good balance of support for employees.
A disciplined approach to management eying leading employees, improving the management team and building the business strategy. Instead of treating each problem as a one off. They design systems and structures that make it easier to handle in the future. (Techrepublic, 2015) 2.2. Risk of exposing confidential data: When an organization outsources HR, Payroll and Recruitment services, it involves a risk if exposing confidential company information to a third-party Synchronizing the deliverables: Some of the common problem areas include stretched delivery time frames, sub-standard quality output and inappropriate categorization of responsibilities. At times it is easier to regulate these factors inside an organization rather than with an outsourced partner Hidden costs: Although outsourcing most of the times is cost-effective at times the hidden costs involved in signing a contract while signing a contract across international boundaries may pose a serious threat Lack of customer focus: An outsourced vendor may be catering to the expertise-needs of multiple company at a time. In such situations vendors may lack complete focus on your organization 's tasks. 2.3. 1.Know the
To outsource or not to outsource, that is the question. It is indeed a question that a CIO, CEO, or IT manager is likely to encounter. It is not a simple question, nor is the answer simple, and there is not a one size fits all solution. As with any decision, it is good to face it with facts and without prejudice. This work shall discuss factors that help determine the answer, risks, benefits, cost analysis, and implications to the business.
They were going to need the best technologies that were available to them. With the constant growth, Bharti needs a way to be competitive in the growing industry. Akhil Gupta, the former CFO and current managing director, recognized that the company was not able to handle its growth and maintain high customer service along with having to manage its ever-changing IT and network services. His proposed idea to handle the challenges Bharti was faced with in their IT and network services was to outsource those areas in which Bharti was not completely competent in. Could outsourcing be the way of the future for Bharti?