Essay On Outsourcing

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Outsourcing itself is generally thought of as a secondary business practice. Ideally it is intended to be a temporary solution to an immediate business need. As technology becomes more sophisticated with the passing of time, outsourcing has grown in activity in the past recent years in tandem with the availability of more advanced, cheaper technologies. These include the proliferation of mobile devices, the increased usage of internet communication and the emergence of CLOUD services being offered by increasing number of vendors. Information technology components now permeate almost all functions of the business world and thus the risks which are present with the use of this technology also has become a growing concern for CIOs and IT managers alike. The approach we took to creating the Risk Assessment Framework for Outsourcing of IT services was to look at the unique characteristics that are involved in a IT outsourcing project. There are several issues that CIOs and managers should be aware of when it comes to outsourcing of IT activities. There are four main differences in risk which separate IT services from other kinds of outsourced activities. Firstly is the difference in Business Operations and Transactions. A flow process should be envisioned for a given transaction and/or IT activity and if there are any steps in the process where the company is reliant on external providers for any kind of input or execution of an activity, then these risks should be examined more carefully. Could there be a possibility of the external supplier failing to meet their obligations and in turn not deliver on their services? Focus should be on the risks that are most likely to occur, since it is impossible to be prepared and aware of A... ... middle of paper ... ...that might be affected directly, or indirectly through the use of an outsourced IT activity. Business continuity risks - These risks pertain to the possibility of stoppage of an outsourcing vendors services provided to your client company. What factors may be a potential hazard to your company's operations in such a case and to look for methods to minimize the negative impact of this kind of scenario. Financial risks - These risks include potential affect on your company's expenditures and monetary repercussions that an outsourced activity might have. A focus is also on the implications for contract terms with the vendor. Governance and Regulatory Compliance risks - These set of criteria is meant to raise awareness of regulations and policies that could be imposed on an institution such as BMO by external agencies and/or federal governmental oversight organizations.

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