| The word outsourcing is often heard in the world of | | | | -Variable capacity |
| business today. It is something which has affected the | | | | -The ability to focus on core competencies by ridding |
| business of almost every nature and every nation. | | | | yourself of peripheral ones |
| Outsourcing is occurring in almost every country of this | | | | -Lack of in-house resources |
| world to some extent. There are some leader | | | | -Getting work done more efficiently or effectively |
| countries in this field of outsourcing such as India and | | | | -Increased flexibility to meet changing business and |
| China. Before moving towards the topic of this article | | | | commercial conditions |
| let us first understand what outsourcing is. | | | | -Tighter control of budget through predictable costs |
| What is Outsourcing? | | | | -Lower ongoing investment in internal infrastructure |
| When discussed in simple words outsourcing is simply | | | | -Access to innovation and thought leadership |
| "a formal agreement with a third party to perform a | | | | -Possible cash influx resulting from transfer of assets |
| service for an organization". A more comprehensive | | | | to the new provider (The ABC's Of Outsourcing) |
| definition for outsourcing would be that outsourcing is | | | | All of these facts contribute largely to the efficient |
| the concept of taking internal company functions and | | | | working of an organization. |
| paying an outside firm to handle them. It is basically | | | | Now the question stand that is outsourcing IT the best |
| done for the following major reasons: | | | | option for your organization? |
| -To save money in terms of lowering costs | | | | To decide on the answer for this question, the |
| -To improve quality | | | | organization who desires to outsource its IT must |
| -To free company resources for other activities such | | | | consider the following aspects first: |
| as focusing more on competencies | | | | -Does the organization posses the internal resources |
| The concept of outsourcing began with the | | | | to run existing mission-critical systems efficiently? |
| data-processing industry and today it has spread to | | | | If the answer to this question is no, then outsourcing IT |
| vase areas which comprise of tele-messaging and call | | | | would be a good step for the organization. As the |
| centers. It would not all be wrong to say that | | | | organization does not have the internal resources that |
| outsourcing is the surge of the next generations. | | | | are required to manage its information systems, |
| Another name used for outsourcing is off shoring | | | | outsourcing IT would have a positive impact on the |
| which has the same meaning as outsourcing. | | | | efficient running and operation of these systems. |
| Technically speaking, outsourcing is not merely the | | | | -Is the organization as a whole ready to consider high |
| contract with a third party to perform a service for an | | | | degrees of organizational and cultural change, in terms |
| organization, but it also involves transferring a significant | | | | of managing its IT operations? |
| amount of management control and decision-making to | | | | Only when the answer to this question is yes, |
| the external supplier. The process of outsourcing is | | | | outsourcing IT would prove to be beneficial for the |
| very much formal like other business processes and it | | | | organization as the people working in the organization |
| always includes a considerable degree of two-way | | | | would readily adapt to the changes occurring as a |
| information exchange, coordination, and trust. | | | | result of the IT being outsourced to a third party and |
| The concept of outsourcing gained popularity in the | | | | work according to the changes |
| mid 1990�s since then the trend of outsourcing | | | | -Does the organization continually need to develop |
| has increased to a great extent. The reason for this | | | | new business and technical interfaces for its |
| increase in the popularity of the concept of outsourcing | | | | day-to-day operations? If yes, is it really more |
| was the rapid growth in the number of high-tech | | | | cost-efficient to deploy internal staff to execute these |
| companies in the early 1990s that were often not vast | | | | tasks? |
| or large enough to incorporate and run large customer | | | | When these questions are discussed, it has been |
| service departments of their own. | | | | observed that if the organization requires dynamic |
| Different Techniques of Outsourcing | | | | changes in its business and technical interfaces |
| The concept of outsourcing was adopted by different | | | | continually, it is better to outsource its IT in order to |
| organizations in different methods such as in some | | | | manage these dynamic changes |
| cases the companies who desired to outsource their | | | | -Based on needs and budget, to what extent will the |
| customer service: | | | | organization's IT functions be outsourced? (Lam, |
| -Hired technical writers in order to write simplified | | | | Outsourcing IT - Is it the Best Option for your |
| usage instructions of their products | | | | Organization) |
| -Index the key points of information | | | | The organization also needs to decide on the budget |
| -Contracted with temporary employment agencies to | | | | and need of its IT functions to be outsourced, it may |
| search for, train and hire generally low-skilled workers | | | | not be necessary to outsource all of the IT tasks, |
| to answer their telephone technical support and | | | | some minor ones could be performed by the |
| customer service calls. | | | | organization itself. |
| The most wide spread method of outsourcing being | | | | The process of outsourcing IT is not as simple as |
| adopted throughout the world is of call centers. The | | | | outsourcing of customer services or other such tasks. |
| people employed at the call centers answered the | | | | It is a complex decision. The decision should be based |
| query calls of the customers, where the information | | | | on a solid understanding of departmental performance. |
| needed to assist the calling customer was indexed in a | | | | It can be said without doubt that outsourcing IT is the |
| computer system. In most cases the agents were not | | | | best option for your organization if it lowers costs and |
| liable to tell the customers that they were not directly | | | | increases the efficiency of the IT systems of the |
| associated with the original manufacturer. | | | | organization, such that its productivity increases. It has |
| Outsourcing IT | | | | been found be studies that through the process of |
| Outsourcing IT is defined as using outside vendors to | | | | outsourcing IT organizations become able enough to |
| create, maintain, or reengineer IT architectures and | | | | formulate competitive strategies that will have a |
| systems. The methods of outsourcing that have been | | | | positive impact on their financial positions in the ever |
| discussed earlier in this article are those which have | | | | competitive global marketplace. |
| now become old, one of the latest one is outsourcing | | | | The company which desires to outsource IT must also |
| IT. The process of outsourcing IT involves the | | | | realize the fact that the total amount of an outsourcing |
| effective management and operation of information | | | | contract is not the exact representation of the money |
| technology assets of corporations from a remote | | | | and other resources that the company would be |
| location. To explain this concept, consider the example | | | | required to spend while it outsource IT functions to a |
| of the management of a computer network of a large | | | | third party. |
| corporation which includes outage monitoring, alarms | | | | The Best Places in the World to Outsource IT for |
| monitoring, remote monitoring of data centers, etc. The | | | | organizations |
| nature of these operations is complex and requires a | | | | As it has been observed by considering the |
| real-time support when needed. Hence it can be | | | | outsourcing trends in this era, India seems to be leading |
| assumed that such processes cannot be easily | | | | the outsourcing industry but when we talk specifically in |
| outsourced to places where there is a big difference in | | | | terms of outsourcing IT, United States is the best |
| the time zones. Such tasks are outsourced to | | | | place, according to A.T. Kearney Global Services |
| comparable time zone locations, which are competitive. | | | | Location Index 2005. This index also identified |
| Outsourcing IT- Is it the best option for your | | | | Singapore as the Best IT services business |
| organization? | | | | environment. India and China also dominate over the IT |
| From all the facts discussed above we can gather | | | | services in the Asian region to less extent. Other |
| that outsourcing IT is beneficial for organizations in | | | | attractive destinations for outsourcing IT are Central |
| many ways out such as: | | | | and Eastern Europe but the costs are higher there |
| -Lower costs, which might be due to economies of | | | | (The ABC's of Outsourcing). |
| scale or lower labor rates | | | | |