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Outsourcing It Functions

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Outsourcing IT Functions

Lionil Alvaerez

CIS Strategic Planning / CMGT-578

May 13, 2010

Professor: Robert Whaler

University Of Phoenix

Abstract

Outsourcing is defined as the process of obtaining professional services from third party companies that will perform the same duties as in-house employees (Thompson, 2010). But outsourcing goes beyond just obtaining professional services, it is in fact the strategic use of outside resources (Faulhaber, 2005).There are many reasons an organization can take into account to consider outsourcing their IT functions. They can range from cost cutting measures, and improving IT services, to have the opportunity to tap into professionals with a higher level of expertise, that among other things can provide the rapid deployment of IT projects, or to have the IT team concentrate on projects that can provide the organization with a higher and faster Return On Investments or ROI.

As there are many good reasons for outsourcing, there are also drawbacks that in the end could have a detrimental effect on the organization. Therefore, there are many issues to consider. This paper will discuss various aspects of outsourcing IT function such as, what are some of the determining factors that may lead an organization to outsource or not their IT functions, risks and benefits associated with outsourcing, where do the costs originate in an outsourcing agreement, and what are some examples of the dollar impacts which might be expected, what are the implications to the business organizational structure by using an outsourced IT department as well as the potential personnel issues which may arise.

Determining Factors to Outsource or not to Outsource

According to an article written in 2005 by Thomas A. Faulhaber for Business Forum Online, he clearly points out that “outsourcing is the strategic use of outside resources…...

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