Outsourcing is a recent term denoting the contracting out of any business operation to an outside party, especially another firm. Outsourcing is increasing nowadays in all areas including Information Technology (IT) systems. According to Crow and Muthuswamy (2014, 26), IT-based outsourcing is the use of third party service providers to effect IT-enabled processes of business such as infrastructure solutions, application services, and utility services, among others. For comprehension, the following context explores the benefits of outsourcing IT systems. It will do so by considering two fundamental aspects, namely, cost reduction and access to superior talent. The intent is to increase the knowledge-ability regarding the importance of outsourcing IT systems in current times.
Outsourcing of IT systems is a beneficial option if an organization wants to reduce its operations costs. With regards to Keahey et al. (2014), the cost for contracting out computing services is lower as opposed to setting up a separate IT department in a company. The business does not need to spend on the hardware, software, infrastructure, and service that support an active IT department. It only needs to pay for the service alone, thereby cutting down costs. More so, the saving of expenses does not correlate with acquisition of low-quality IT services. Crow and Muthuswamy (2014) agree that the quality is always high due to ever-increasing competitiveness in the outsourcing sector. With high-quality IT systems, coupled with saved expenses that can fund other initiatives, the business is poised to increase the efficiency and effectiveness of its operations, thereby leading to the realization of high productivity.
Another crucial feature to consider is the access to talent, which is acquirable by outsourcing IT systems. As noted earlier, the outsourcing sector is competitive. To attract clients, third party providers of IT services invest in quality software, hardware, and manpower as predisposed by Crow and Muthuswamy (2014, 37). In this case, the labor embroils highly talented individuals. This scenario proves that a company that outsources IT systems does not need to invest in hiring and training IT workers. That is the work of an organization that seeks contracts. Therefore, it has to recruit and train workers in all areas of IT systems. Since it concentrates on IT systems alone, employees are inclined to attain skills, knowledge, and competencies. All these base on specialization, which evokes expertise in specific areas. When experts provide IT services, Keahey et al. (2012) acknowledge that the results comprise of quality work. Further, the doing of tasks is not only fast but also efficient. What eventuates is the reduction in lead time, which is an advantage in the scope of the value-added proposition. It is where the fast moving of processes increases the accessibility, availability and affordability of products in the market. This outcome indicates competitiveness, innovativeness, and productiveness of a company.
Following the analysis of the insights above, it is right to conclude that outsourcing of IT services is more of necessity rather than an option nowadays. As evidenced by research studies, an organization that outsources IT systems stands a chance of saving operation costs and accessing talent. These two benefits are vital if a company wants to stay competitive, innovative and productive in the market. With these desirable outcomes that regard outsourcing of IT systems, there is the need to explore the downsides of the same in another contextualization.
Crow, G.B. and Muthuswamy, B., 2014. International outsourcing in the information technology industry: Trends and implications. Communications of the IIMA, 3(1), pp.25-34
Keahey, K., Armstrong, P., Bresnahan, J., LaBissoniere, D. and Riteau, P., 2012, September. Infrastructure outsourcing in multi-cloud environment. In Proceedings of the 2012 workshop on Cloud services, federation, and the 8th open cirrus summit (pp. 33-38). ACM.
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