There are many factors that need to be taken into account in a decision to outso

Question

There are many factors that need to be taken into account in a decision to outsource some or all of the organisation’s information systems. Put yourself in the position of Chief Information Officer at a medium-sized manufacturing/exporting firm that is considering outsourcing some of its systems to another country (for example, Elbonia). You have been asked to provide an opinion on some aspects of this proposal.

Q1. List and discuss three advantages that could flow to your firm from outsourcing some of its information systems function to Elbonia.

Q2. List and discuss three disadvantages that could flow to your firm from outsourcing some of its information systems function to Elbonia.

Q3. Discuss one information system in this firm that you think would be suitable to outsource immediately.

Explanation / Answer

The advantages of outsourcing Information systems :-

Reduces labor costs : It definitely reduces cost and also helps in focussing on Human resources, mitigates the risk of temporary employees cost and benefits.

Focus on Core Business : By outsourcing you can focus on your core business instead of the peripheral which requires your unnecessary time.

New Partner Engagment : You have a new partner now which keep you engaged with the activity and also helps in builiding relationship and network with them which always benefits your growth directly or indirectly.

The disadvantages of outsourcing Information systems :-

Taxing laws : Sometimes it is complex with the taxes for the parent company, Employing several outsourced for-profit enterprises can impact the taxes assessed on the outsourcing company.

Quality : Product can be well maintained if it is maintained by the company that developed, Outsourcing companies needs to be given extensive training to maintain the same.

Management: It needs to get adapted with the different time barriers, so it sometimes does impact the decision making.

The one information system in this firm that you think would be suitable to outsource immediately is ITO Information Technical Outsourcing which helps significantly on the cost factor and we also get a better deal for employees.

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