Information System Outsourcing: Advantages, Issues, and Challenges

This article discusses the advantages, issues, and challenges of information system outsourcing. It covers topics such as cost-effectiveness, expertise, language and cultural barriers, and hidden costs.

Abstract
The information system outsourcing is one of the effective practice of contracting out the
different functions of business and processes to the third party. The organization focus on
improving the business strategies and increased efficiency of the business as well. The IT
outsourcing is a method for handling the practices which seeks for the resources and how the
organizations would range from infrastructure to software development, with proper
maintenance and support. They are used in different mediums like the moving of business or the
services overseas and then transferring the business to the other country [1]. Some of the
activities are the web development, host planning and proper management of the application
support. The advantages of the outsourcing is considered to be the expertise. The overseas
vendor and the business goal is about how the special equipment and technical expertise helps in
making the employees better at a given task. The reduced costs for the labor and the operations
helps in improving the flexibility of staffing. The outsourcing is a common practice and the third
leader parties can focus on handling the costs savings, with efficiency for the greater competitive
advantage [2]. There are improvement on core business activities with increased efficiency to
choose the company that mainly specializes in the processes to service and how one is able to
carry out the productive and efficient services as well.
There are certain issues of outsourcing, where the language and the cultural barriers affects the
employees and the customers [3]. It is seen that the different time zones has been a barrier to
communicate and also coordinate for the different activities among the companies. A complete
slow turnaround is coupled with the differences in time which leads for a longer project or the
resolution time. This can easily lead to the loss of quality till one is investing time in the process
screening rigorously. The problems are related to the service delivery, confidentiality and

security with direct control over the business function or the process [4]. The lack of flexibility
contract could provide to be completely rigid for accommodating the changes and handling the
management difficulties as well. The instability also brings a major problem for the business
development.
The offshore outsourcing is considered to be cost effective with additional challenges like the
hidden costs where the provider selection or the handover is cost related to layoffs of local
employees. This is mainly for those who are not to be relocated internationally. The management
of the offshore relationship can be proved as challenging mainly due to the difference in the time
zones, languages and the preferences of culture.
References
[1.]Duhamel, François, Isis Gutiérrez-Martínez, J. E. Macias-Figueroa, Luis F. Luna-Reyes,
and Sergio Picazo-Vela. "Best Practices in the Management of IT Outsourcing in the
Public Sector." In Proceedings of the 18th Annual International Conference on Digital
Government Research, pp. 596-597. ACM, 2017.
[2.]Teo, Thompson SH, and Anol Bhattacherjee. "Knowledge transfer and utilization in IT
outsourcing partnerships: A preliminary model of antecedents and
outcomes." Information & Management 51, no. 2 (2014): 177-186.
[3.]Gorla, Narasimhaiah, and Toni M. Somers. "The impact of IT outsourcing on information
systems success." Information & Management 51, no. 3 (2014): 320-335.
[4.]Liang, Huigang, Jian-Jun Wang, Yajiong Xue, and Xiaocong Cui. "IT outsourcing
research from 1992 to 2013: A literature review based on main path analysis." Information &
Management 53, no. 2 (2016): 227-251.