IT Outsourcing Management

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IT Outsourcing Management

• Dr. Kishen Iyengar

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What is Outsourcing?

• Outsourcing is the transfer of ownership and
  responsibility of a functionality from a firm to
  an other legal entity.
• Outsourcing has been around for decades,
  especially in non-core activities.
• IT outsourcing to firms based in other countries
  is referred to as offshoring If the provider is
  in the same country it is called onshore
  outsourcing

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IT Outsourcing

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Benefits of Outsourcing

• Cost Benefits lower manpower costs, reduced
  capital costs, on-demand teams
• Business and Organizational Benefits faster
  time to market, risk migration, ability to focus
  on core competencies, improved processes
• IT outsourcing may involve any activity in the IT
  organization including routine processes like
  desktop support, hardware and network
  maintenance, or complex functions such as
  implementation of ERP

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Outsourcing Process
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Questions in the IT Outsourcing Process

• What function do I need to outsource?
• What are the risks involved?
• Who do I outsource to?
• What are the terms of the outsourcing contract?
• How to decide if the outsourcing contract is a
  success, Did it meet expecations?
• Should I renew the contract?

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What functions to Outsource?

• Require minimal client or end-user interaction
•    Have mature features and stable well defined
  requirements
•    The process is standardized, repetitive, well
  segmented and documented
•    Do not involve secure or sensitive data
•    Large enough to produce substantial benefits
•    Low added value or labor intensive
•    The application/process is stable with a
  reasonable expected life time
•    Low operational complexity
•    Low to medium business criticality

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Risks?

• Country
• Criticality
• Employee motivation
• Others?
• After risks are considered, you may invite other
  parties to submit their proposals by issuing an
  RFP

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Who to Outsource to?

• When you are deciding between multiple vendors,
  you may want to look at certain aspects of each
  vendor to help you decide.
• Reputation
• Management
• Markets and Clients
• Staff
• Technology and Process

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Reputation
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Management
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Markets and Clients
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Staff
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Technology and Process