Function Outsourcing
IT Function Outsourcing
The advancements in the field of information technology have paved way for digitization of operations and automation of functions. In the recent decade it has become a need which is the source of cost reduction, efficient operation and competitive advantage as well. This is the reason; almost every organization is seriously considering the option of introducing IT in its operations. Since information technology is the combination of computer technology and communication technology, it has specialised body of knowledge and people with specialised skills are required in the field. Many organizations have developed an altogether new department of IT to look after the routine operations, maintenance of IT hardware and software and perform support functions whenever required.
Keeping in view the vast scale at which IT operations are conducted and the standardized software tools coming in the market to meet the requirements of many organizations in general, IT experts have formed IT organizations which perform IT function of the organizations on their behalf. It is known as outsourcing and this paper will cast light upon various aspects of IT outsourcing.
Determining Factors to the Decision of Outsourcing
The most important factor behind outsourcing is the lack of specialised skills in every organization. As mentioned earlier, not every organization possess the required level of expertise and resources to manage its IT functions. Hence, outsourcing is an ideal situation in which the organizations free themselves from the responsibilities of maintaining infrastructure, upgrading the tools, and providing the support services. Examples include, web hosting and email hosting to third party, making contracts for design, implement and support the IT network, data backup, ensure security and perform routine maintenance functions. The organizations do not hire any IT expert themselves rather the IT organization maintains their desk there. It is also possible that the IT team is available on call and quick support is provided...
Depending upon the nature of agreement between the two organizations, the duration, level and fee of support can be determined.
Discouraging Factors of Outsourcing
Despite promised advantages offered by IT companies, many organizations do not adopt this option and establish their own IT department. This is mainly because of data security concerns. Public sector organizations particularly do not rely on any service provider and tend to have their own infrastructure. They hire expertise and incur high cost of maintenance of their network.
In this era where the world has become global village, adherence to network security is of prime importance (Hudson, 2006). Outsourcing means, the organizations store all their data at the servers of IT organization and they may access it whenever they want.
Another discouraging factor about outsourcing is the relationship between the two firms. Since IT firms are not too old in the field that old large organizations consider them to be their partners. It is also expected that IT boom can dwindle anytime and the dependence to third party may lead to unfavourable outcomes.
Risks associated with Outsourcing the IT function
There is a strong risk of data misuse associated with outsourcing IT functions (Tho, 2005). Another risk includes leakage of corporate secrets. Quite recently, the initiatives of privacy impact assessment (PIA) are enjoying much value. It determines that the data provided by the clients to the organization must be used for the purpose for which it is acquired by the same organization. Using it for any other purpose, though legitimate one, may also be considered a misuse of data and threat to the privacy of client.
Benefits associated with outsourcing
The biggest benefit associated with outsourcing lies in its cost-benefit analysis (Corbett, 2004). The organizations save the cost of establishing their own IT department and training their resources upon the required skills up to the expert level. IT organizations are expert in IT function and…
