Outsourcing Projects
- Types of sourcing
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In sourcing (in-house-development)
o
A common approach using the professional
expertise within an organization to develop and maintain the organization’s
information technology systems
o
Do sourcing with own department
o
Example: expert in IT. So do they expect in own
department
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Outsourcing
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An arrangement by which one organization
provides a service or services for another organization that chooses not to
perform them in-house
o
Example: Do the outsource in other company
- 3 types of outsourcing
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Onshore outsourcing
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Engaging another company within the same country
for service
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Near shore outsourcing
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Contracting an outsourcing arrangement with a
company in a nearby country
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Example: Singapore, Thailand and China
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Offshore outsourcing
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Using organizations from developing countries to
write code and develop systems
o
Example: Japan, Korea, united kingdom, Canada,
and US
- Factors driving outsourcing growth include:
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Core competencies
o
When use core competencies, we can get more
benefit because we get focus about your expert and can get outsourcing
ü
Financial savings
o
Do the outsource with China because salary is
cheapest
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Rapid growth
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Growing faster. Put the initiative to do outsource
with the develop company
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Industry changes
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The internet
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For marketing, information, system, does with
internet. Easy to use.
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Globalization
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Don’t have excuses for do the outsources if
don’t have the expert. Don’t to if not, we can get loss.
Outsourcing Benefits
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Increased quality and efficiency
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Reduced operating expenses
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Outsourcing non-core processes
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Reduced exposure to risk
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Economies of scale, expertise and best practices
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Access to advanced technologies
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Increased flexibility
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Avoid costly outlay of capital funds
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Reduced headcount and associated overhead
expense
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Reduced time to market for products or services
Outsourcing Challenges
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Contract length
o
Difficulties in getting out of a contract. For
example, do the contract with US 5 years. In 5 years, we cannot void the
contract.
o
Problems in foreseeing future needs. For
example, if someone came to our company to do the IT system, the workers maybe
don’t want to know about IT.
o
Problems in reforming an internal IT department
after the contract are finished.
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Competitive edge
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Confidentiality
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Scope definition
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