Chapter 19 Outsourcing

12 terms by lf27ny 

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Insourcing (in-house development)

is a common approach using the professional expertise within an organization to develop and maintain the organization's information technology systems.

Outsourcing

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

Common Departments outsourced by organizations

IT (>50%)
HR (>40%)

Main reason companies outsource

Tap outside sources of expertise.

IT outsourcing enables organizations

to keep up wit market and technology advances-with less strain on human and financial resources and more assurance that the IT infrastructure will keep pace with evolving business priorities.

Onshore outsourcing

engaging another company within the same country for services.

Near outsourcing

contracting on outsourcing arrangement with a company in a nearby country. Often this country will share a border with the native country.

Offshore outsourcing

Using organizations from developing countries to write code and develop systems. In offshore outsourcing the country is geographically far away.

Influential drivers affecting the growth of the outsourcing market include:

-core competencies
-Financial savings
-Rapid growth
-Industry changes

Banking and finance

Check and electronic payment processing.

Insurance

Claims reporting and investigation.

Outsourcing challenges

-Contract length
-Competitive edge
-Confidentiality
-scope definition

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