Benefits and Challenges of Information Systems Outsourcing

INFORMATION SYSTEMS OUTSOURCING
Name:
Student Id-
Name of univeristy:
1

Abstract— The outsourcing is presently going through the
period of the overpowering growth. This paper provide the idea
about the major reasons why the firms are leading to the changes
and are adopting the features of the IS outsourcing and the
benefits that are gained by the business. The risks of the IS
outsourcing is clearly discussed in this report. It has been
observed that the organisation are provided with the opportunity
of having the improved IS services and there is the possibility of
achieving the technological improvements along with the cost
reserves in the staff as well as the technology have been
commonly viewed as significantly significant and they does not
appear as the precedence motives for the outsourcing in the
present study. Concerning the risks that are connected with the
IS outsourcing, these risks are majorly linked with the providers
along with the immense apprehension of being articulated
regarding the lack of the qualification amongst the staff of the
providers, the possible absence of the agreement with the
contracts along with the inability of the adapting the new
technologies.
(Keywords—IS outsourcing, Benefits, Challenges)
I. INTRODUCTION
Introduction
This report intends to provide the clear discussion of the
benefits and the challenges that are associated with the IS
outsourcing. The benefits of the IS outsourcing is briefly
stated in this report and the challenges of the IS outsourcing is
briefly discussed in this report. The introduction of the
information system in the organisation have been significantly
beneficial for the organisations but there might be some
challenges that are associated with the outsourcing that could
damage the working of the information system in the
organisation. Lastly this report concludes with the appropriate
conclusion for the report.
II. BENEFITS AND CHALLENGS IN INFORMATION SYSTEMS
OUTSOURCING
A. Benefits
As it has been discussed in the earlier studies, the
organisations majorly outsource the aspects that could not be
effectively managed by the business [1]. It is sometimes done
for being immensely effective and efficient in the competitive
environment. Some of the advantages of the IS outsourcing for
the businesses are:
Cost reduction: The method of the outsourcing could be
used by the organisations for the gaining of the inferior cost
base of the external services benefactors that allows the
decrease in the operation costs of the IT or the complete cost of
the IT ownership [2]. It allows the company in releasing the
supplementary finances for the utilisation in the other zones
with the strategic standards. The requirement of the
information systems in the organisation could be over
emphasized as several companies requires the IS outsourcing
for the providing the service at the lower costs. The hardware
and the software that are required for the implementation of the
information system are significantly expensive but this rate
could be easily reduced by the outsourcing of the various
components to the external service providers [3]. It could be
significantly costly while maintaining and also improving the
systems for constantly meeting the requirements of the
business.
Access to the specialist resources: The specialist are
significantly important in the outsourcing due to the fact that
the training and the development of the employees could be
significantly expensive for the businesses [4]. There is the
requirement of the selecting the service benefactor with the
modern technologies as well as the abilities who could offer
the entrance to the capabilities and the professional resources
that could decrease risk of any failure while at similar time
overtake the opponents on the technological front.
Enhanced focus: The outsourcing of the information
systems permits the companies in focussing on the core
business processes by the offloading of the operational phases
to the service provider with the major proficiency in the IT
grounds [5]. The companies could immensely focus on the
optimisation of the supply chain, fulfilling the requirements of
the customers as well as improving the contribution towards
the business objectives. The information systems that are
implemented in the organisation requires the extensive
management and the monitoring for the efficient working and
this task could be difficult for the organisations without the
proper resources and the procuring of the resources could be
costly also [6]. This is among the major reason why the
companies choose the core functions of the information
systems.
Improved risk administration: The risks are significantly
intrinsic in any of the business conclusions, because of the
vigorous competition in the markets, the government
legislations, the economic circumstances and the inclinations in
the technology. It could be immensely costly for the
management of the all kinds of the risks internally [7]. The
outsourcing permits the companies in the better utilisation of
the properties and the proficiency of the professionals that
effects in the improved risk administration as associated to the
internal handling. The failure could not be considered as the
option for the organisation who are working in the business
environment where there could the loss due to the inefficiency
[8].