IT Outsourcing

Today, Information Technology is expected to meet with regular changes in IT and performance needs of economy. To meet the challenges, organizations are finding outsourcing a better option. IT Outsourcing comes when an organization gives the task to a service provider to perform an IT function for them. The service provider is a third party or other part of entity.

Many types of IT Services can be outsourced. The management can outsource for several reasons, may be operational, technological, financial etc. Operational conditions can be like, to improve service quality, develop and maintain robust systems, reduce the efforts for real business. The technological benefits may include, achieving IT efficiencies, access to people processes and technology, being up to date with changing technology, improving the quality of IT services. The financial reasons may include, bringing IT costs in control, minimizing the risk of investing in the wrong technology.

Outsourcing has many advantages

o It allows companies to hire best experts for the required work.
o Organizations can put much cash on hand, freeing resources to other tasks.
o Cheaper in terms of salaries, benefits and reduces risks and costs.
o Organizations can focus on its core components.

IT Outsourcing also have some pitfalls

Operational Problems includes failure of systems, unauthorized access to data, further; it is possible that organization is unable to identify the problem. Sometimes IT professionals are sent to the service provider, this results in lack of knowledgeable staff.

Service Problems may be the difference between the services of service provider and what the services organization wants. That may be due to following reasons, the organizations standard and the service provider standards may not be the same, or service provider may not fully appreciate organizations priorities.

Cost Problems may occur if outsourcing is not well planned related to management. Lack of planning is the biggest problem of outsourcing. In addition, services, processing and technologies change over outsourcing. Sometimes due to unexpected situations if an organization, terminate an outsourcing contract it includes high costs.

An outsourcing decision can have a long-lasting influence on the reputation and performance of the company. The organization's business objectives and how to meet them are accomplished through use of Information Technologies. They examine an outsourcing option benefits and risks, the importance of the IT activity to the company as whole, the impact of the outsourcing arrangement on the organization's reputation.

The organization must not only identify its requirements, it must define its obvious performance criteria. The organization must evaluate the credentials of service provider. Finally is the decision whether to continue with the outsourcing arrangement or not.

It is very important that service provider understands the needs of the organization's business processes and systems. The organization must ensure that service provider do this. The organization must develop the thorough understanding of the providers financial and operating conditions, for examining the service provider's operational and financial ability to fulfill the organization's needs and objective's.

Concluding the topic, IT outsourcing should be the integral part of a company's overall business strategy.