Information System Outsourcing Report: Advantages and Disadvantages

This report provides a comprehensive overview of Information System (IS) outsourcing, addressing its advantages and disadvantages. It begins by defining outsourcing as a collaborative process between organizations, specifically focusing on IT business processes where tasks are assigned to third-party entities. The report highlights the benefits of outsourcing, such as increased revenue for third-party companies and mitigation of human resource and overhead cost issues for the client organization. However, it also discusses the challenges, including the need for proper negotiation, selection of appropriate resources and third-party organizations, and the potential for project failure and scope creep. Security issues, such as data breaches, are also considered. The report concludes with references to relevant academic literature on the topic, including works that explore information security concerns, management of IS outsourcing, and the role of outsourcing in improving the effectiveness of logistics and e-government systems.

Information System
Outsourcing
Advantages and Disadvantages

Introduction
 The outsourcing is the process where the collaboration between two
or more than two organization is occurred.
 It can be said that the outsourcing is the business process in IT where
certain works are assigned to a third party organization.
 The responsibility of the third party organizations is to execute the
work on behalf of the client

Benefits
 It has been seen that most of the product based companies are
taking help from the well-known third party organization.
 The works are outsourced to this organization.
 In this situation, the third party companies are getting better
revenue and their profits are increasing

Cont..
 On the other hand, the lack of human resources and the experts in
the parent organization is not affecting the production of the
organization.
 This also mitigates the human resources problem and overhead
running cost for the organization.

Challenges
 The negotiation process is needed to be done in a proper way. Apart
from that there is a need that the selection of the right resources to
be outsourced.
 Moreover, it is the responsibility of the organization to select the right
third party organization to where the project will be outsourced.
 There is a high chance that the project can be failed. In this case, the
outcome of the project may not deliver the desired result.
 This will affect the functionalities of the organization.

Cont..
 If the third party organization is not following the project life cycle
process in a proper way, there is a chance that the scope creep can
be present in the project.
 Moreover, there are security issues regarding the outsourcing
process.
 In case, if the third party organizations are not following the proper
rules and regulations regarding the development of the project, there
is a chance that the breaching of the data can occur which is not
desirable in this situation.

References
 G. Dhillon , R. Syed and F. de Sá-Soares. Information security concerns in IT outsourcing: Identifying (in)
congruence between clients and vendors. Information & Management, 54(4), pp.452-464. 2017
 K. Mehmood, and A. Hussain, November. Managing association of information system outsourcing: A case
of information technology (IT) service provider. In 2017 4th International Conference on Systems and
Informatics (ICSAI)(pp. 1703-1707). IEEE. 2017
 S. Patil and W. Wongsurawat. Information technology (IT) outsourcing by business process
outsourcing/information technology enabled services (BPO/ITES) firms in India: A strategic gamble. Journal
of Enterprise Information Management, 28(1), pp.60-76. 2015
 K.M. Gilley, A.A Rasheed and H. Al-Shammari. Research on Outsourcing: Theoretical Perspectives and
Empirical Evidence. In Global Outsourcing Strategies (pp. 41-56). Routledge. 2017
 K. M. Gilley, A.A. Rasheed and H. Al-Shammari. Research on Outsourcing: Theoretical Perspectives and
Empirical Evidence. In Global Outsourcing Strategies (pp. 41-56). Routledge. 2017
 W. Zhu, S.C. Ng, Z. Wang and X. Zhao. The role of outsourcing management process in improving the
effectiveness of logistics outsourcing. International Journal of Production Economics, 188, pp.29-40. 2017
 Y. He and Y. Lu, March. Risk Prediction and Dynamic Risk Simulation of Each Stage of E-government System
Outsourcing. In 2017 2nd International Conference on Automation, Mechanical Control and Computational
Engineering (AMCCE 2017). Atlantis Press. 2017

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