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Risks Of It Outsourcing Essay

681 words - 3 pages

IT Outsourcing
The prospect of outsourcing various administrative and business functions may appear worthwhile when comparing vendor costs against the direct costs the company is currently spending. However, there are many additional factors that many companies do not measure that must be taken into consideration when making this choice. The IT Department specifically is one that greatly influences the success or failure of a company. It touches all areas of the business and when operating properly can help propel a business toward success or could cause a business to fail. IT, as a critical business function, will always need some presence within the business to ensure issues are ...view middle of the document...

Internal employees know or have immediate access to key operational personnel that will contribute to the design of a system and ultimately use it. In house IT personnel, with an established understanding of the company’s culture, can better analyze the company’s needs and ensure that key business functions are not overlooked in the planning and analysis phases of a new system design. Also, for troubleshooting and helpdesk functions, long term employees will likely have an historical perspective of the systems and knowledge of previous issues making them more knowledgeable and better able to respond.
External Dependency
Companies are challenged with meeting aggressive goals and objectives that enable them to remain competitive in today’s global market. Placing one of the most critical functions required to achieve those goals in the hands of an external organization is a risk that must be managed very carefully. Should the organization with whom the IT functions are outsourced fail to deliver on services promised, they may be faced with penalties or other provisions agreed to for service failures; however, the company that entrusts their critical functions to...

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