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12 terms

Chapter 19 Outsourcing

STUDY
PLAY
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