MITS4001: Research Study on Information System Outsourcing

This report provides a comprehensive analysis of Information System (IS) outsourcing. It begins with an abstract that defines IS outsourcing as the practice of assigning a portion or all of an organization's IT functions to external service providers. The report highlights the benefits, such as improved system efficiency and reduced IT-related risks. The report also addresses the disadvantages, including security concerns, vendor failures, and potential loss of customer focus. The research employs a literature review to examine the existing body of knowledge on IS outsourcing, and it also highlights the importance of risk management in outsourcing. The report uses qualitative research methods and content analysis to evaluate the benefits and challenges of outsourcing for businesses. This includes examining how outsourcing can reduce costs and improve IT system efficiency, while also acknowledging the potential for decreased customer focus if not managed carefully. The report emphasizes the need for companies to effectively manage security risks associated with outsourcing and underscores the significant impact of IS outsourcing on business performance.

BUSINESS INFORMATION SYSTEM 0
ABSTRACT
The term outsourcing is defined as a business
practice of hiring a party outside an
organization in order to perform services and
goods. It is identified that information system
outsourcing is an effective process that has the
ability for improving the performance of
business industries. Information system
outsourcing is the practice of turning over part
of companies IS functionalities to the services
and products providers. The aim of this
research paper is to analyse the key aspects of
IS outsourcing and evaluate the advantages
and disadvantages of outsourcing system. A
recent study identified that there are various
benefits of IS outsourcing, for example,
enhanced the overall efficiency of the system,
decreased risks linked with IT system,
monitored the cost of equipment and provided
better investments to the consumers. In order
to improve the effectiveness of the paper a
literature review is conducted which analysed
the results of previous studies. The authors
provided only theoretical aspects of IS
outsourcing which create a gap between the
facts and research title. This literature survey
critically reviewed the concept of information
system outsourcing and identified the risk
factors linked with the outsourcing process.
Security is the biggest problem faced by
companies while using information system
outsourcing. This paper identified that IS
outsourcing provides a platform to the
companies in order to enhance the
performance of their business and increase the
overall flexibility of the IT system. There are
various kinds of drawbacks of IS outsourcing,
for example, security issues, process
discipline, loss of business, vendor failure to
deliver, productivity fluctuations and so on.
Therefore, in this advanced generation, it is
very important for companies to control and
manage the security risks linked with the
outsourcing system because it directly impacts
on the performance of companies and personal
data of users. In the last few years, there are
numerous papers published on this topic and
many authors provided their views on the
importance of IS outsourcing in the business
sectors. It is analysed the fundamental idea of
information system outsourcing and identified
the advantages and disadvantages of
outsourcing system. There are various research
methods used in this study for example
qualitative research design, research strategy,
secondary data collection and descriptive
content analysis method. It is analysed that
there are several advantages of outsourcing for
example swiftness and expertise, risk sharing,
reduced the cost of requirements and
operations and improved the efficiency of IT
systems used in the organizations. From this
study it has found that a lack of customer
focus is another disadvantage of outsourcing
which directly impacts on the effectiveness of
business. An outsourced vendor can be
catering to the expertise requirements of
multiple companies at a time period. In such
kind of condition vendors or employees may

BUSINESS INFORMATION SYSTEM 1
lose focus of customers from the
organization’s products and services. This
research paper critically reviewed the role of
IS outsourcing in business industries and
analysed their benefits and drawbacks.
Keywords: outsourcing, IT system, risk
sharing, security, and lack of customer focus