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Chaptter 8

3.3 OOutsourcinng

Outtsourcing means contracting oout aspectss of the woork of the
orgaanisation, ppreviously done in-hoouse, to sppecialist prroviders.

There aare four keey types of outsourcinng:

 Tootal – wheere the thirdd-party suppplier provvides most or all of thhe organisaation’s
ITT systems aand services

 AAd-hoc – wwhen the orrganisationn needs IT support foor a short pperiod and hires in
exxternal suppport as neeeded on aa temporarry basis

 Partial – whhere some IT functionns are outssourced, such as maaintenance or
suupport, butt others aree kept in-hhouse

 Project managementt – similar t to ad-hoc, this occurrs when thee creation and/or
immplementation of a sppecific IT ssystem aree outsourceed to a thirdd party suppplier

Advanttages Dissadvantagges

 Supplier mmay have sspecialist  May be difficult too bring IT bback
sskills that tthe organissation in-house at a laterr date, as may
lacks lose staaff with speecialist
knowleddge from thhe organissation
 May operaate on a fixxed fee
ccontract, reemoving uncertainty  May leaad to beingg locked intto an
ssurroundinng IT fees ffor the yeaar unfavouurable conttract with aa poor

quality ssupplier
 May improove businesss
fflexibility, aallowing vaariation of  Will alloow third-paarty supplieer
tthe level oof work the supplier access to the orgaanisation’ss
performs informaation, whichh may risk data
securityy breachess
 TThe suppliier may bee more
eefficient att running thhe IT  By relying on a third party foor its
ffunction, leeading to ccost IT, the oorganisatioon will havee no
ssavings way to ccreate its oown, uniquue
systemss. This meeans it cannnot
obtain ccompetitivee advantagge
from its systems

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