Outsourcing Essay

Question 2:

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We have signed a contract with a company that has locations all around North America. Our client wants all work in process and past material to be accessible from anywhere in North America. We have to develop a suitable strategy to accommodate our client needs.  Since, we cannot fulfill client’s requirements and publish copies of the work on our company website as marketing tool, so there is one possible approach is to outsource all work to a service provider. Thank you for giving me an opportunity to present how outsourcing could be handled, pros and cons of outsourcing models and ethical issues.

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Let me explain the definition of outsourcing. Outsourcing occurs when a company purchases all or portion of goods or services from external vendor, rather than performing the same task within its own company, in order to cut cost.  In our case, we are considering outsourcing work in process, archived all past material and finished work to external vendor which would allow our client to easily access the work anywhere in North America.

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There are several types of outsourcing models; however, 3 models are most common and widely used by the companies. Traditional outsourcing means outsourcing the entire set of operations allocated to a single service provider. Whereas, SaaS model, runs relatively generic application access through the Internet and firms contacting SaaS get less choice for application design. On the other hand, a Shared service facility (Web hosting) is a popular model of outsourcing. In this model, provider and its customers work as a team in maintaining and operating systems.

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There are several advantages of outsourcing all or portion of a company’s IS system. Many companies embrace outsourcing as an ability to save costs. Companies usually outsource to a vendor that specialized in the given function and perform that function with efficiently then company could do.  Through outsourcing company could gain access to new technology and external expertise. This may be beneficial for a small business who cannot afford to hire IT expert or develop in-house IS systems.  However, there are some limitations of using outsourcing model. One of the major concerns is that companies will loss the direct management control over its operations, which could result in dependence of external vendor. Furthermore, it reduces the flexibility in how applications are operated and limits the options of customization based on client needs.