A Closer Look at IT Outsourcing

Posted April 3rd, 2007 by Mybusiness

Outsourcing is the process of designating another company to
perform certain functions or operations that are used to be done
internally. A lot of manufacturing
companies have been outsourcing one or two of its operation to outsourcing providers
from developing countries like India, China, Philippines
and Eastern Europe. Today, outsourcing has evolved from simple manufacturing
or administrative tasks to more complex and diversified fields such as
Information Technology (IT) Outsourcing, Software Development Outsourcing,
Application Development Outsourcing, and Business Process Outsourcing, just to
name a few.

Let’s take IT outsourcing for example. A company may choose to outsource one or all
of its IT operations, depending on its needs.
It may assign its software development to outsourcing, while its
internal IT department concentrates on other initiatives.

Meanwhile, through business process outsourcing, a business
may farm out some of its business functions such as accounting, desktop
support, web development, application maintenance, and other tasks related to
processing.

Other options in outsourcing involve the outsourcing
provider’s geographical location. It may
be local on-site, offsite, near shore and off shore delivery. Local on-site delivery means the outsourcing
provider and the client company collaborates as one organization and directly
interacts with each other through-out the whole project. In contrast, offsite delivery means the staff
and equipment are provided through regional development centers.

Near shore delivery operates through development centers in
countries like Canada and Mexico for the United States to prevent international risks. Whereas,
offshore delivery means the workforce is located to a different country like India, China, Russia, and Philippines which produces highly-skilled employees at a much lower rate.

Generally, outsourcing involves these four phases:

Analysis and planning. The tasks required, the client’s
expectations, the procedures involved – these are all deliberated between
the client company and the outsourcing provider. Here, they both sign a Statement of Work
(SOW) which discusses the services that will be provided and a Service
Level Agreement (SLA) which stipulates
the rules of engagement.

Transition. This is where the transfer of operations takes
place. If a staff provision engagement
is agreed, the outsourcer operates with its own staff. On the other hand, if a staff assumption
engagement is agreed, the client’s IT staff is reassigned as employees of the
outsourcing provider. Transition period
usually lasts from 12 to 16
weeks until the outsourcer assumes full responsibility of the operation.

Operations. This phase is where the actual tasks
stated on the Statement of Work (SOW) are implemented. The client also designates its own
in-house personnel to monitor and regulate the performances of the
outsourcing team.

Transition out. This is the conclusion or the final
phase of the outsourcing engagement.
The outsourcing provider surrenders its appointed operations back
to the client company.

Truly, outsourcing has opened doors for companies and
businesses alike to save significant amounts of their resources, get access to
superior and high-quality skills in their respective area of expertise, enhance
the capabilities of the company’s internal IT organization and allow their
internal management to focus more in enhancing customer satisfaction tactics
and strategic operations.

In order to be successful however, outsourcing should be
correctly executed. For instance, before
deciding to outsource a function, a company needs to be sure that IT
outsourcing is indeed the solution to the problem. Furthermore, a company should be very careful
in deciding which of its functions will greatly benefit from outsourcing.

Finding the right outsourcing partner is also crucial
especially in outsourcing information technology. IT outsourcing entails a long-term connection
and disengaging from such connection prematurely due to discontent in the
outsourcer’s services can be very damaging for the business. Therefore, careful evaluation and extensive
research must be conducted in considering a prospective outsourcer. The client
company must remember that more than the cost-cutting factors, the outsourcer’s
capabilities, experience, expertise, and reputation should be primarily
considered. The outsourcer’s location,
culture, and its communication abilities must also be guaranteed.

As for the client, it is responsible to monitor, and
regulate its outsourced functions regularly and continuously for throughout the
agreed period of operation. Building a
strong and collaborative relationship with your outsourcing provider will help
you reap the best benefits that outsourcing can give.

About the Author

Liz Roberts is a successful internet marketer and has been using outsourcing to fuel her everyday online marketing business. In her recent years in the arena of online marketing, she was able to build a competent team of outsourced webmasters performing link building strategies and creating web templates.

________________

OutsourcingTemps.com

A Closer Look at IT Outsourcing

Vote Result

Primary links

Search

User login

Syndicate