Information Technology Outsourcing

QUESTION

1. Critically evaluate the competitive advantage that can be gained by companies through IS/IT outsourcing. Provide suitable example to support your answer.

The phenomenon of outsourcing has significantly affected the information technology or information system industry over recent decades. This is because, the constantly changing modern business environment forces companies to adapt and accept new practices. Outsourcing allows modern companies worldwide to concentrate on their core activities and ain a competitive edge in the marketplace.

Outsourcing basically means asking a third-party vendor to work for you on a contractual basis. Usually, companies outsource primarily to cut costs, but today, IT outsourcing generally is defined as contracting with outside vendors to do various IT functions such as data entry, data centre operations, application maintenance and development, disaster recovery and network management and operations. There are many competitive advantages that will gain by the company if they outsource IS/IT, which is:

a) Increasing IT Operational

Commonly, companies will increase IT investments in order to deal with operational complexity but the result is usually an assortment of IT systems greatly in need of integration. Using an outsourcing approach allows distribution companies to consolidate and rationalize their global IT network. As an example, a large carrier was able to reduce its servers by half, resulting in a savings of up to 5% of its IT development costs within three years by outsourcing its IT operations.

b) Outsourcing IT/IS will control capital cost

Saving money is one of the most compelling reasons for company outsource IT services. This is because, through outsourcing, the company can c...

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...rus protection software and make sure the software is updated because all the information and data that are available in organization is important. The organization needs to be sure to update your anti-virus software with the latest patch and signature files for maximum security. Anti-virus software without latest update is very vulnerable to attacks by newest strands of viruses which are appearing everyday.

e) Use a firewall

Use a firewall. Firewalls prevent infiltration of hackers and other malicious threats. The organization should keep a well maintained firewall between the computers and the Internet. If the employees from the organization are using cable or DSL connections to the Internet, a hacker can attempt to break-in to their computer 24 hours. So the organization has to make sure they have a router or firewall properly that was installed and configured.