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IT Sourcing - Coggle Diagram
IT Sourcing
The Phenomenon
core competence logic
perceptual challenges
integration problem
receiving the wrong system
decision about whether HOW and WHERE to outsource IT
reason to outsource can create problems:
to access IT skills absent
cheaper vendor
Three routine:
business process outsourcing
customers support
call centers
remote workers
crowdsourcing
commodity IT infrastructure and services
commodity software
negotiating price, service, controls
Strategic consequences for Non-IT managers' involvement
software embedded in a firm's product
custom built apps
non-recurring IT tasks
Insourcing vs Outsourcing
Insourcing
advantages:
identical interests
retains inhouse expertise
thwarts imitation
disadvantages:
lack of inhouse skills
potentially costlier
Outsourcing
advantages:
access skills absent inhouse
cheaper for intermittent IT works
disadvantages:
not employees
disconnect from business needs
Challenges:
integration problems
Strategies to lowering integration costs
concurrent sourcing
verify-then-trust approach
receiving the wrong system
Strategies to avoiding wrong system
tapered outsourcing
match requirements ambiguity with contract choice
What should never be outsourced?
mission criticality and differential potential
interaction intensity and labor intensity