Outsourcing of ICT

Question:

Start a new journal so you can keep a log of YOUR activities undertaken in this project. Your columns should include item reference number, date of entry, activity name, activity description, planned action, status – open or closed, and any notes. Make an entry every time you do any work on your assignment. The journal is the diary of your project – not a fictional account. 

Answer:

Outsourcing of ICT

With the changing economic along with social systems, there have been huge changes in the development of information technology (IT) and communication system. One such change is associated with ICT, which signifies the technologies used for telecommunication, media, audiovisual as well as processing the network-based functions. The concept of ICT is similar to IT; however, the only difference is its scope (The World Bank Group, 2016). The CEO of the Case Study organisation has decided to outsource their ICT and this comprises the existing as well as the new systems. 

There are different ways of categorising ICT resources and the activities involved. This is mainly because ICT is considered as an integral part of any organisation. It is required for performing various business activities. Technological development has resulted in the improvement of technology available within an organisation. This in turn has enabled the suppliers in diversifying the kind of services offered to the organisations. ICT business offers innumerable services, a majority of which can be outsourced (Prado, 2011). The table provided below in Figure 1 illustrates at a glance the scope of outsourcing for the company.

Many companies tend to follow ICT outsourcing for retaining their competitive advantages within the target markets. After the historic event of dot-com bubble, the concept of ICT off-shoring was formulated. It signifies that companies would set some services for the developing countries (Almalki, 2012). The outsourcing of the ICT services by the Case Study company will be more beneficial if it is carried in the low and middle-income countries. The rationale behind the selection is associated with the growth of telecommunication (use of mobile, internet and broadband) among the low and middle-income economies all round the world (Figure 2) (The World Bank Group, 2016).  

Pros and Cons of Outsourcing ICT

According to Alexandrova (2007), in the modern management outsourcing, ICT is considered as one of most influential tools. A majority of organisations in the present competitive scenario prefer outsourcing. The reason behind the stated fact is that outsourcing enables improved ability to focus on the issues related to strategic dimension, along with gaining technology access, specialized expertise and improved services among others. Besides, outsourcing is different from partnership, joint venture and alliances. The difference is due to the one-way flow of resources that is from the suppliers to the outsourcers. One of the most common benefits of outsourcing is associated with the concept of cost reduction. In this regard, it is believed by majority of organisations that outsourcing of service (one or more) would be beneficial in terms of cost-cutting (Alexandrova, 2007). 

Chukwunonso & Ribadu (2010) stated that ICT outsourcing enables the organisations to manage internal along with the external affairs of the business efficiently without any trouble associated with IT. The rationale behind the stated fact is that the supplier is completely responsible for handling the responsibility of any technical support (if required) as well as other consultancy issues. Based on the statement of Alexandrova (2007) that outsourcing is cost effective, it has been claimed by Chukwunonso & Ribadu (2010) that outsourcing of ICT is not confined to this benefit only. Outsourcing of ICT also facilitates a strategic move of the business, which enables gaining competitive advantage in the market. Another advantage is that it brings about wide-spread opportunities for organisations, for instance utilisation of experts and skill-set that was not possible normally for any organisation without investment. Organisations deciding to outsource must consider two factors i.e. to outsource ICT or not and steps that should be taken to make outsourcing successful. Considering the two factors, it can be highlighted that that organisations outsource to only those vendors who have the potential to perform a specific task or function efficiently. Besides, another advantage of outsourcing is to gain headcount reduction. The term headcount reduction signifies achieving minimum fluctuation in staffing, which is likely to occur due to alteration in the demand for the products and/or services (Chukwunonso & Ribadu, 2010)

The above pictorial illustration depicts few advantages and disadvantages of outsourcing. One of the vital advantages of outsourcing is improved quality of the services offered. According to Khan & Zafar (2015), outsourcing enables sharing the risk factor with the vendor. The vendor selected is considered to be a specialist thus is likely to develop risk-mitigating strategies and assist the organisation in ensuring quality performance along with reduced risk. In addition, outsourcing develops flexibility within organisations. This in turn proves to be beneficial for improving the effectiveness of organisation in terms of changing business environment. According to Kremic, Tukel & Rom (2006), outsourcing one of the business processes facilitates maximising the overall strength of the core business. 

According to Arshad, May-Lin & Mohamed (2007), outsourcing is carried in different forms such as total outsourcing, selective sourcing and strategic alliance among others. These forms not only bring advantages for organisation but also have certain risk factors. From the discussion of pros, it has been apparent that outsourcing requires huge initial investment. Investment by the company incurs few risk factors such as it affects the performance of business, flexibility along with day-to-day operations. In this regard, it becomes essential for organisations to consider the quality of service, relationship with business partners and cost factor as important to reduce the stated risk at least to some extent. Prado (2011) highlighted few other risk factors in outsourcing such as exposure of confidential data. The Case Study organisation will involve outsourcing of ICT services, thus, it becomes essential to remain cautious about not revealing the company’s confidential information to the third party (suppliers/vendors). Another con is associated with the synchronisation of different variables. For instance, if an organisation is unable to recognise a suitable supplier, it becomes difficult to handle the delivery factor (time) and quality of service. The main reason behind the already mentioned fact is that managing tasks within an organisation is much easier as compared to that of the outsourced partners (Prado, 2011; Arshad, May-Lin & Mohamed, 2007). 

The framework developed by Kremic, Tukel & Rom (2006) also highlights few risk factors associated with the outsourcing of services, which is a completely new process and involves huge cost (few costs are unknown), thereby posing innumerable challenging for any organisation. It has been further asserted that most of the outsourcing failure is associated with inefficient methodology. In this context, Kremic, Tukel & Rom (2006) argued that outsourcing failure is due to inability of the mangers in determining proper methodology for guidance. Often outsourcing is done by contracting with the international partners, which on the other hand also poses threats for the company due to the hidden cost involved apart from that of investment. 

Based on the above analysis of pros and cons of ICT outsourcing, the following model has been proposed for the Case Study organisation to reduce risk and maximise the chances of success.

Outsourcing Delivery Models 

There are many different outsourcing models based on the total number of suppliers. The model will be selected based on the outsourcing strategy of the case organisation. The company can follow the outsourcing decision process (Figure 5) to determine the most suitable model for implementation. 

The following are the different outsourcing delivery models that can be used by the CEO of the Case Study organisation.

Different Models Of Outsourcing Implementation

Internal delivery This model is also known as homogeneous model of outsourcing and is associated with a single vendor or supplier. In this model, the ICT services are provided by the internal staff of the company

Shared Services This model requires the development of an internal department, which will be responsible for handling the outsourcing of ICT services

Independent Company In this model, a separate company is developed. The company will serve the ICT service requirement of the parent company along with the ICT market 

Total Outsourcing A contract is made with a single supplier for most of the ICT services

Prime Contractor In this model, organisations hire a single supplier and offer a wide range of services. However, the single supplier in this case possesses the authority to get involved in sub-contract with other vendors as it is effective in delivering quality services

Best-of-breed consortium This model is different from the others as the client in this case is responsible for selecting the ICT outsourcing company and accordingly, the vendor is selected for better management of supply

Selective outsourcing In this model, organisations require to select suppliers, who possess the ability of performing necessary services efficiently

Joint Venture This signifies the development of a new organisation by two (or more than two) partners

According to the report of Huws & Dahlmann (2004), the business functions outsourcing includes software development, data processing, sales, customer services, financial functions, Human Resources (HR), Research and development (R&D). Thus, based on the category of outsourced functions, the team members of the case organisation will provide services to organisations of different sizes. The team will operate in different levels as presented in the figure 8 below. Furthermore, maintenance of ICT outsourcing at different levels is vital involving consulting, service management, desktop support, application support, infrastructure support along with supplier maintenance support. Future scope for ICT acquisition also exists in case the organisation acquires and/or merges with another company offering similar services. This will prove to be effective for both the case organisation and the acquired organisation for extending the overall scope of business. 

It is assumed that the project is completed and the respective suppliers/vendors have been selected for outsourcing of ICT. The objective of the project was to select suitable suppliers for the organisation as its aims to outsource its existing as well as new ICT system. The company to find appropriate suppliers used the heterogeneous model of outsourcing. The pros and cons of outsourcing reflected that it is beneficial for the company to retain performance along with maintaining flexibility within the system. Besides, it was proven effective for the Case Study organisation in gaining competitive advantage in the market. However, the company is likely to face certain risk factors, which can be mitigated by implementing appropriate strategies. One of the effective strategies was evaluating the skills and competencies of the suppliers in offering the service along with contributing to the overall success of the Case Study organisation. In addition, the company has further scope of development by acquisition of ICT, held by other competing organisations with the aim of improving the existing system. 

Suppliers for the project were evaluated based on the criteria for score designed in the above section. The evaluating team of the Case Study organisation was given the responsibility to analyse the potential suppliers/vendors. After selecting the suppliers/vendors, the KPIs were examined in order to determine their capability of ensuring long-term performance. From the overall discussion, it is recommended to the CEO of the Case Study organisation to improve its tender evaluation system from time-to-time for facilitating success in the outsourcing of ICT not only within the domestic market but also internationally.  

References

Alexandrova, M. 2007, ‘International outsourcing: incentives, benefits and risks for the companies in see countries’, University of National and World Economy, pp. 11-16. 

Almalki, J 2012, ‘ICT offshore outsourcing: its appeals and impacts’, International Journal of Computer Science Issues, vol. 9, iss. 6, pp. 359-362. 

Arshad, N. H., May-Lin, Y. & Mohamed, A 2007, ‘ICT outsourcing: inherent risks, issues and challenges’, Wseas Transactions on Business and Economics, vol. 4, iss. 8, pp. 117-125. 

Chukwunonso, F. & Ribadu, A.Y. 2010, ‘Exploring the benefits of outsourcing information and communication technology to a vendor company in Nigeria’, Journal of Information Systems research and Innovation, pp. 25-34. 

Huws, U. & Dahlmann, S 2004, Outsourcing of ICT and related services in the EU: European Monitoring Centre on Change, viewed 05 June 2016, < http://www.uni-mannheim.de/edz/pdf/ef/04/ef04137en.pdf>.

ICT Solutions, 2016, IT Outsourcing, ICT Solutions, viewed 05 June 2016, < http://www.ictsolutions.com.mt/pages/solutions-managed-services.aspx>.

Khan, M. N. A. & Zafar, I 2015, ‘Benefits of outsourcing the ICT infrastructure’, International Journal of Scientific & Engineering Research, vol. 6, iss. 3, pp. 1265-1278. 

Kremic, T., Tukel, O. I. & Rom, W. O 2006, ‘Outsourcing decision support: a survey of benefits, risks, and decision factors’, Supply Chain Management: An International Journal, vol. 11, iss. 6, pp. 476-482. 

Prado, E. P. V 2011, ‘Risk analysis in information technology and communication outsourcing’, Journal of Information Systems and Technology Management, vol. 8, no. 3, pp. 605-618. 

Šaravanja, M 2008, ‘ICT outsourcing – models and experiences’, PLIVA Member of a Barr group, pp. 1-7. 

Stark, J., Arlt, M., & Walker, D. H.T 2006, ‘Outsourcing decisions & models – some practical considerations for large organizations’, International Conference on Global Software Engineering, pp. 1-6. 

The World Bank Group 2016, Information Communications Technology for Development, About, viewed 03 June 2016, .

Vacca, J.R. 2005, A Step-By-Step Guide to Writing a Successful Outsourcing RFP, Information Management: Strategy, Systems, And Technologies, viewed 05 June 2016, < http://www.ittoday.info/AIMS/Information_Management/1-02-05.pdf> 

Bibliography

Al-Mutairi, M. S 2010, Cases on ICT Utilization, Practice and Solutions: Tools for Managing Day-to-Day Issues: Tools for Managing Day-to-Day Issues, Idea Group Inc (IGI), USA. 

Click, R. L. & Duening, T.N. 2004, Business Process Outsourcing: The Competitive Advantage, John Wiley & Sons, New Jersey. 

Harbhajan, K 2006, Outsourcing and Offshoring in the 21st Century: A Socio-Economic Perspective: A Socio-Economic Perspective, Idea Group Inc (IGI), USA. 

Langfield-Smith, K., Smith, D. & Stringer, C 2000, Managing the Outsourcing Relationship, UNSW Press, Australia.

McIvor, R 2005, The Outsourcing Process: Strategies for Evaluation and Management, Cambridge University Press, UK.

St.Amant, K 2009, IT Outsourcing: Concepts, Methodologies, Tools, and Applications: Concepts, Methodologies, Tools, and Applications, IGI Global, USA. 

Thiadens, T 2008, ICT Governance, Management and Organization, Lulu.com, USA.

BoomGrades.com is
a name in 
assignment writing services that
students trust. We offer our assignment writing services for a wide variety
of 
assignment including essaysdissertations, case studies and more. Students can place
their order with us anytime as we function 24×7, and get their copies at
unbeatable prices. We guarantee that all of our solutions are plagiarism-free.

Calculate the price
Make an order in advance and get the best price
Pages (550 words)
$0.00
*Price with a welcome 15% discount applied.
Pro tip: If you want to save more money and pay the lowest price, you need to set a more extended deadline.
We know how difficult it is to be a student these days. That's why our prices are one of the most affordable on the market, and there are no hidden fees.

Instead, we offer bonuses, discounts, and free services to make your experience outstanding.
How it works
Receive a 100% original paper that will pass Turnitin from a top essay writing service
step 1
Upload your instructions
Fill out the order form and provide paper details. You can even attach screenshots or add additional instructions later. If something is not clear or missing, the writer will contact you for clarification.
Pro service tips
How to get the most out of your experience with Boom Grades
One writer throughout the entire course
If you like the writer, you can hire them again. Just copy & paste their ID on the order form ("Preferred Writer's ID" field). This way, your vocabulary will be uniform, and the writer will be aware of your needs.
The same paper from different writers
You can order essay or any other work from two different writers to choose the best one or give another version to a friend. This can be done through the add-on "Same paper from another writer."
Copy of sources used by the writer
Our college essay writers work with ScienceDirect and other databases. They can send you articles or materials used in PDF or through screenshots. Just tick the "Copy of sources" field on the order form.
Testimonials
See why 20k+ students have chosen us as their sole writing assistance provider
Check out the latest reviews and opinions submitted by real customers worldwide and make an informed decision.
Medicine
Great content.
Customer 452549, February 8th, 2022
world civilization
Thank you for the quick response
Customer 452509, June 27th, 2021
english comp
Thank you for all your hard time.
Customer 452509, June 27th, 2021
Classic English Literature
Absolutely LOVE the essay I received. I really appreciate it so much.
Customer 452529, October 25th, 2021
Religious studies
I recommend this service they always help. I got an A in this project thanks.
Customer 452507, October 5th, 2021
Classic English Literature
Awesome Job... you are the best!
Customer 452531, November 27th, 2021
English comp
Got a 94% thank you!
Customer 452509, June 27th, 2021
Classic English Literature
Great Work as Usual. Thank you . I received an A on the paper!
Customer 452531, November 9th, 2021
English 101
perfect! thanks!
Customer 452543, December 1st, 2021
english comp
Great paper and done before the deadline. Thank you
Customer 452509, June 15th, 2021
Literature
Absolutely LOVE having help especially from the person who wrote this last one. THANK YOU
Customer 452529, November 19th, 2021
Exercise Science
Thank you so much for your time.
Customer 452545, December 5th, 2021
11,595
Customer reviews in total
96%
Current satisfaction rate
3 pages
Average paper length
37%
Customers referred by a friend
OUR GIFT TO YOU
15% OFF your first order
Use a coupon FIRST15 and enjoy expert help with any task at the most affordable price.
Claim my 15% OFF Order in Chat