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For
any organization, the outsourcing of the IT services and the systems save a lot
of time of the organization and also improves the quality of the systems. Along with all of the benefits of the
outsourcing, there are many of the issues that might occur in the firm while
outsourcing the IT services and systems. Before outsourcing any of the IT services and
the systems, some of the aspects that must be considered by the management of
the company are as follow
The
first problem is that, it might late a lot of time by the outsourcing firm to
actually understand that is needed to the outsourcer firm. For the management
it would be very difficult to make the outsourcing firm understand all of the
demands of the IT services that they want to have in their systems. Sometimes
the outsourcer firm can take up to 2 to 3 months to actually know about all of
the requirements of the systems.
The
other issue that the management of the company needed to consider while
outsourcing the IT services and the systems is the budgeting of the project. When
the management of the organization makes any project related with IT services
themselves, they have their own equipment and the management team, but in case
of the outsourcing of IT services and the systems all of the labor and the
equipment are from the other firm that can increase overall cost of any project
in the company. So it is very important for the management of the company to
plan an estimated cost of the project including the IT services and the systems
outsourcing, so that there would be no issue while implementing the project and
out sourcing
Less control.
When
any of the company outsources its IT services and the systems, it means they are
totally relying on a third party for the services treated with IT– depend on
their resources, their services and their knowledge. Preferably, the changeover
works out. Nonetheless uncertainty the company is not always contented with the
vendor in the third-party, it requires to do more time as compared to starting
from scratch. It requires to organize what the external vendor has previously
done with novel IT plans – for example using another vendor or building IT
in-house.
Security.
The services in the cloud computing share
their possessions with other residents. This allocation helps to save expenses
and makes IT accessible, but it mean that some of the companies will use some
of the same devices and servers. This makes security considerations that needs
to be managed, particularly if the corporation has severe compliance needs.
Compatibility.
Compatibility
of IT services and the systems can be an issue for the management of the
company while they think of outsourcing, particularly if a business is keeping
some of its outsourcing and IT in-house just portion of the whole IT services.
Lack of collaboration between IT goals and business
goals.
The outsourcing vendors not have the everyday
understanding of the business company that wants IT services and the systems.
They recognize general business and IT sector problems, but they don’t openly
work with customers or employees of the company. For the management it is very
important to collaborate with the outsourcing firm
Expectations
Some
of the companies have some sort of expectations of how things proceed in
theory. Frequently, they do not exercises as easily in preparation. Addition to
the provider of the outsource service is likely to help the company to augment
its overall functions, but this is not always occur instantly. There is a lot
of time is required for both parties to adjust and classify the best method to
work with each other. To overcome this interruption, other than a learning
curve and a few irregular reinforcements. Build this in the company timeline
and deliberate it while setting the objectives of the business.
Organizational culture outsourcing problems
Outsourcing
of the IT services and the systems will certainly have an influence on the organizational
culture. What numerous companies oversee is possible crashes between the company
culture of the provider of outsourcing service and also for the company that
want to outsource the IT services and the system. The company can also overcome this problem by investing
more of the time to recognize the culture of the company’s outsourcing and the
method of doing the business. It is also
likely to help the customers to identify the values or policies that could delay
with the working relationship of the company. From the sides of both parties will have to
find the right movement.
Process adjustments
Once
the company want to outsource the IT services and the systems agree to relationships
with the company that is providing the service, numerous companies are not ready
to start functioning together immediately. This can also result in the work discontinue,
services are not started immediately, and goals are not accomplished.
Decision rights and authority
In the company the Internal employees normally
assume they have the decision rights and authority when, often, some specialist
is transported to service provider as portion of the agreement of the outsourcing.
To overcome problem, outsourcers and companies must have the clear
understanding of who has power of decision-making and authority for the
affected of the functions business
Real
Word Examples
IBM Mega Disaster
In
2007, a contract was awarded to Queensland by IBM to build an application to
manage Queensland's health department payroll. IBM planned to finish the whole project
for $6 million by mid-2008. Soon after starting project, IBM understood that it
confronted many unexpected technical trials and proclaimed to Queensland that
the cost of the project would be around $27 million. The scheme took numerous
years and the platform of payroll never properly functioned. In the short-term,
a lot of staff failed to get salaries, while some were overpaid. Eventually,
the costs of the project, had increased to $1.2 billion. The IBM is one of the
biggest outsourcing disaster
US Navy and EDS
The other example of the out sourcing
disaster is about US Navy and ED, in 2000,
when the EDS contracted by Navy and Marine Corps to offer video, voice,
desktops, system training and network for their workers. By 2004, EDS had inscribed around $500 million in lost
assets as it was not able to fulfill its responsibilities. In its passion to earn
the contract, EDS becomes unsuccessful to hold the full scope of the project
Summing up the discussion about the issues of the outsourcing
for the management, it can be said that the. For the management it would
be very difficult to make the outsourcing firm understand all of the demands of
the IT services. So it is very important for the management of the company to
plan an estimated cost of the project including the IT services and the systems
outsourcing. The company can also overcome this problem by investing more of
the time to recognize the culture of the company’s outsourcing and the method
of doing the business.
References of management
Garland, A. (2015). Five
of the biggest outsourcing failures. Retrieved from
https://www.itproportal.com/2015/12/19/five-of-the-biggest-outsourcing-failures/
Optimalnetworks.com.
(2015). What Are the Problems with Outsourcing IT? Retrieved from
https://www.optimalnetworks.com/2015/05/21/what-are-the-problems-with-outsourcing-it/
Vaultnetworks.com.
(2017). Risks, Benefits, and Challenges of Outsourcing IT Services.
Retrieved from
https://www.vaultnetworks.com/risks-benefits-challenges-outsourcing-services/
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