Information Systems Outsourcing: A Comprehensive Analysis

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MITS4001 - RESEARCH STUDY

Contents
IS outsourcing................................................................................................................................................3
Process of executing IS outsourcing..........................................................................................................3
Benefits..........................................................................................................................................................4
Challenges......................................................................................................................................................4
Conclusion.....................................................................................................................................................5
Reference.......................................................................................................................................................6

Abstract
IS outsourcing
Information system (IS) outsourcing can be
defined as the process in which tasks or works
of an organization is provided to other
organization that is being hired for the
processing of the tasks provided. Outsourcing is
a very old process and has been used by the
organization for centuries. This process helps
the organization to share its load and tasks with
other organizations that have the resources and
ability to resolve the tasks. This process helps
the organizations to accomplish their tasks and
processes within a required time frame.
Outsourcing is performed by an organization so
that particular tasks which are new to the
organization or the internal staffs of the
organization are not able to perform the tasks or
lacks expertise on the certain tasks which are
present for a short duration in the organization.
Such tasks are directly forwarded to the
organizations which have the expertise to
resolve the task. This process incurs a cost
which is determined by the organization that
processes the tasks for the other organization.
This process also helps in performing the tasks
at low rates compared to performing the task at
the organization by recruiting certain domain-
specific professionals in the organization to
perform the task [1].
Process of executing IS outsourcing
The process of outsourcing is changing day-by-
day. Due to its evolvement, the requirement of
planning a proper strategy to execute the process
of outsourcing has become mandatory for an
organization so that the process of outsourcing
will generate positive results for the
organization. The strategy of executing an
outsourcing process can be described as follows-
 Outlining the goals and objectives of the
organization-
This step allows the organization to
determine the objectives and goals for
outsourcing. This includes various factors
for which the organization wants to process
outsourcing such as increasing the growth of
revenue, decrease the requirement of
investments, using organizations resources
in processing other tasks, cost reduction, and
also to obtain certain skills which are not
present within the organization.
 Outlining the requirements of the
organization-
This step is performed to acknowledge the
requirements of the organization for which it
requires outsourcing. In this process, the
organization interacts with the outsourcing
organization to know if they can perform the
task properly.
 Determining the performance and costs of
the process-
This step is performed to determine the
performance levels in which the
organization to whom the data or task is
outsourced will work. The cost of operation
will also be determined in this process.
 Outlining success factors-
This step will determine the process of
tasking by which the provided task will be
completed. In this the organization will
determine the rate of success by visualizing
how the work provided will be performed
[1] [2].
Benefits
The benefits of IS Outsourcing includes-
 Increased efficiency in working within an
organization.

 Obtain expertise for tasks that are not
present in the organization.
 Enhanced management of risks.
 The organization can focus its resources on
the core objectives and outsource other tasks
to efficiently manage the tasks [2].
Challenges
The challenges of IS outsourcing includes-
 Quality of task can be a huge concern for an
organization. The task if not well performed
then it can impact the organization as well as
the client.
 Leakage of sensitive information is another
important risk in the process of outsourcing
which can cause huge loss to the
organization.
 Outsourcing core task can also create issues
within an organization as majority of the
core files contain numerous data which can
be used against an organization and cause
harm to the organization such as bankruptcy
[3].
Conclusion
From this abstract, we can understand the
process IS outsourcing. We can also know the
requirements of outsourcing in organizations
and the process of how it is performed. This
paper describes the processes involved in the
outsourcing methodology. This abstract is also
presented with the benefits of outsourcing and
also the challenges involved in the process of
outsourcing. It can be concluded that IS
outsourcing, though filled with challenges helps
an organization in performing various tasks at
lower costs thus gaining revenue in the process.
Reference
[1] Chris, “What is Outsourcing and How
Does it Work?,” Chrisducker.com, 05-Dec-
2016. Available:
https://www.chrisducker.com/how-outsourcing-
works/.
[2] R. Gonzalez, J. Gasco, and J. Llopis,
“Information systems outsourcing reasons and
risks: a new assessment,” Industrial
Management & Data Systems, vol. 110, no. 2,
pp. 284–303, 2010.
[3] Q. Yang, X. Zhao, H. Y. J. Yeung, and
Y. Liu, “Improving logistics outsourcing
performance through transactional and relational
mechanisms under transaction uncertainties:
Evidence from China,” International Journal of
Production Economics, vol. 175, pp. 12–23,
2016.