MGS 3040-03
Group D
TO THE OUTSOURCE
VENDOR
TO THE ORGANIZATION
*Take of control
*Obtain expertise
*Deliver error free services
*Avoid management
problems
*Free management time
*Improve quality
*Reduce implementation risk
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Every vendor has a set of forms, procedures,
committees, reports and other management
tools
They have to do things according to the
vendors standard blueprint
If they allow every company to be different
than they will never gain leverage or profits
I strongly disagree with this statement, this is very bad for
the company. Every company have their own sets of forms,
procedures, data, and management tools. If you don't know
how to figure out or don't know how to handle an important
managerial function you are in deep trouble. You can't rely
always on someone else thoughts, you have to have the
knowledge of the functions to question future ideas and
catch some eventually mistakes. You can't put the life of your
company in someone else's hand with a completely eyes
closed.
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It is possible for an outsource vendor to achieve economies of a scale that isn’t
possible for the hiring organization by:
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Reduce implementation risk
▪ Paying one fixed cost on solving a function in your company rather then paying more for an
internal employee to learn the function every time it changes.
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Risk Reduction
▪ Easier to hire and fire an external vendor then it is for an internal employee.
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Reducing the cost in your company.
▪ Hiring an outside vendor reduces the risk of making a bad choice for the company because they
know what procedures to make .
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The phenomenon doesn’t justify outsourcing because it means that your
company has to rely on an external vendor on a function that your company
should be able to do on its own. The company losses its intellectual capital and
relies on the minds of external vendor and doesn’t know their direction in their
goal. The company can be paying someone else’s mismanagement. It is also
expensive and risky if the decision to change vendors is ever made. Outsourcing
shows that the company doesn’t show control in the direction they are taking.
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Outsourcing is the process of hiring another
organization to perform services.
The organization save money reduces cost of hiring
personnel, improve service, and reduce risk.
Per the father of modern management, Peter Ducker
“your back room is someone else front room” This
mean that some companies such as Bing, or Google
wants to be known as the globally leader search. They
do not want to be known as how well they run their
cafeteria. In this case these companies will hire an
agency that specializes in food services. On the other
hand, Food Services Company (front room) will be able
to perform this job, (the outsourcing company).
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Outsourcing IS infrastructure functions are to plan the
use of IT to accomplish organizational goals and
strategy, Develop operate and maintain the
organization’s computing infrastructure, Manage
Outsourcing relationship.
It is not just to hire a company to perform a service we
do not want to do, it is also to manage the outsourcing.
For example, many businesses are investing Web 2.0
opportunities and planning utilizes those capabilities to
better accomplish their goals.
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Information System assists companies to achieve their
goals more than just get rid of a problem.
Information technology focuses on products,
techniques, procedures, and designs of technology.
Some believe outsourcing is a treat to US economic.