Outsourcing Projects
• Insourcing (in-house-development) – a common approach using the professional expertise within an organization to develop and maintain the organization's information technology systems
• Outsourcing – an arrangement by which one organization provides a service or services for another organization that chooses not to perform them in-house
• Onshore outsourcing – engaging another company within the same country for services
• Nearshore outsourcing – contracting an outsourcing arrangement with a company in a nearby country
• Offshore outsourcing – using organizations from developing countries to write code and develop systems
Factors driving outsourcing growth include:
- Core competencies
- Financial savingsRapid growth
- Industry change
- The Internet
- Globalization
Outsourcing benefits:
- Increased quality and efficiency
- Reduced operating expenses
- Outsourcing non-core processes
- Reduced exposure to risk
- Economies of scale, expertise, and best practices
- Access to advanced technologies
- Increased flexibility
- Avoid costly outlay of capital funds
- Reduced headcount and associated overhead expense
- Reduced time to market for products or services
Outsourcing challenges:
- Contract length
- Competitive edge
- Confidentiality
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