Nursuhada Binti Abd Ghafar BM111 4C

Chapter 19 outsourcing in the 21st century
1. In sourcing(in house development) - a common approach using the professional expertise within an organization to develop and maintain the organization's information technology systems

2. Out sourcing - an arrangement by which one organization provides a service or services for another organization that chooses not to perform them in-house

3. On share outsourcing- engaging another company within the same country for services

4. Near share outsourcing - contracting an outsourcing arrangement with a company in a nearby country

5. Off share outsourcing - using organization from developing countries to write code and develop systems

6. Big selling point for off share outsourcing "inexpensive good work"

7. Factor driving outsourcing growth include:
- Core competencies
- Financial savings
- Rapid growth 
- Industry changes
- The Internet
- Globalization

8. According to PricewaterhouseCoopers "Businesses that outsource are 
growing faster,larger, and more profitable than those that do not

9. Most organization outsource their non-core business function, such as payroll and IT

10. Out sourcing benefits include:
- increased quality and efficiency
- reduced operating expenses 
- out sourcing 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

11. Out sourcing challenges include
> Contract length
i) Difficulties in getting out of a contract
ii) Problems in foreseeing future needs
iii) Problems in reforming an internal IT department after the contract is finished
> Competitive edge
> Confidentiality
> Scope definition