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CHAPTER 8 :arrow_forward: IT SOURCING - Coggle Diagram
CHAPTER 8 :arrow_forward: IT SOURCING
Considerstions of where to outsource
Country profile
Cultural and language
Skill sets in region
Legal sophistication
Time zone
Phenomenon
Core competence logic
Led to wholesale resourcing
Trifecta: Digitization, software infusion, and ubiquitous connectivity
Prepetual challenges in outsourcing IT
Integration problems
Receiving the wrong system
Decisions about whether, how, and where to outsource what IT
Reasons to outsource can create various problems
To access IT skills absent inhouse
Vendor cheaper than doing it inhouse
What should never be outsourced
Interaction intensity and labor intensity
Mission critically and differentiation potential
Unstrategic IT Sourcing Desicions
Business process outsourcing enabled IT
Commodity IT infrastructure and services
Commodity software
Why outsource?
Improves service quality
Gives ability to cut cost
Allows to focus on core services
Gives access to high value talent or skill
Gives access to technology
Strategies for avoiding the wrong system
Match requirements ambiguity with contract choice
Tapered outsourcing
Strategies for lowering integration
Verify-then-trust approach
Japanese-style screening using dummy projects
Concurrent sourcing
Prevents outsourcing from being irreversible
Fosters healthy competition between inhouse IT and vendors
Helps write better contracts and better specifications
Just a little (-10%) suffices
Challenges in Outstanding IT
Integration problems
Actual costs can wipe out abvious savings
often uses or sends data to them
Pacthwork of inhouse systems, spanning generations
Must play well with your other IT asstes
Receiving the wrong system
Double whammy: Business-IT chasm + cut
Outsourcing adds extra translator layer between users and vendor
Might get what your IT unit asked for
Latent needs create volatile requirements