Please respond to the following: Reflect upon the economic factors that would le

Question

Please respond to the following: Reflect upon the economic factors that would lead a CIO to consider outsourcing or offshoring critical IT segments (i.e., help desk support, software development, and quality assurance) as a viable option for an organization. Analyze three economic factors that could lead the CIO down the path of outsourcing or offshoring. Assess whether or not economic factors lead to the same level of IT outsourcing or offshoring decisions, despite the business or industry. Explain your answer.

Explanation / Answer

Offshore outsourcing of information systems services has been growing rapidly
in recent years and is likely to continue into the foreseeable future. The primary
reason behind this trend is the apparent economic cost advantages gained by offshore
service procurement. Offshoring is not unique to the information systems function.
Manufacturing and online customer services, for example, have been outsourcing their
work to Mexico, China, Ireland, and other countries for some time. Information
systems outsourcing has been widely adopted for more than two decades, but offshore
outsourcing of information systems services is a relatively recent phenomenon. The
significant growth in communication technologies and the increased demand in recent
Themes of Chapter 11
What is offshore outsourcing of IS projects?
What are the main differences between outsourcing and offshoring?
What are the benefits of offshore outsourcing?
What are the consequences of offshore outsourcing?
Is information systems project offshoring different from other offshoring projects?
Do all information systems projects benefit from offshore outsourcing?
How can project managers plan offshore outsourcing?
11-Avison-45664:11-Avison-45664 7/29/2008 7:18 PM Page 351
years for information systems professionals in the United States and Western Europe
have made offshore outsourcing of the information systems function an attractive
option. In addition, the availability of an educated workforce in other countries, such
as India and China, has made the offshore outsourcing of information systems services
a reality. The offshore outsourcing of information systems services has implications
for IS management. Information systems project management, in particular, is influenced
by this trend in a variety of ways, including human resource issues, scheduling,
relationships management, communication, quality control, risk, and evaluation.
Information systems graduates need to be prepared for the challenges and opportunities
presented by offshore outsourcing of the information systems function. This
chapter will describe the origin of outsourcing and the reasons behind the offshoring
of information systems services. This chapter further describes the impacts of outsourcing
on the individual and organization, and the skills that are necessary for the
management of offshore projects. This chapter ends with discussion questions that
highlight the multifaceted nature of the offshore outsourcing phenomenon in terms
of culture, measurement, quality and the like. But first in Exhibit 11.1 we look at
potential problems that might arise when offshoring.
352 INFORMATION SYSTEMS PROJECT MANAGEMENT
Exhibit 11.1 Managing Diversity
Diversity is the essence of reality. It exists in any group or team that we are associated with: the
family, work place, society, and the like. Successful enterprises have greatly benefited from the diversity
of workforce, culture, and talent. The critical success factor in dealing with diversity is to understand
the strengths and weaknesses in any situation. This assessment is more critical when we deal
with global entities.
Success of international business depends to a large extent on the management of diverse
relationships. The trend to offshore outsourcing information systems services is a new development.
In a short period of time we have learned a great deal about opportunities and challenges
that come with offshore outsourcing decisions. There is still a great deal that we do not know.
We need to learn more about the management of diversity and the new relationship in vendor

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