Actual Benefits of Information Technology Outsourcing

1) Critically evaluate the competitive advantage that can be gained by companies through IS/IT outsourcing. Provide suitable example to support your answer.

Introduction

Outsourcing is an arrangement in which one company provides services for another company that could also be or usually have been provided internal. As we know, outsourcing is a development that is becoming further common in information technology or information system and other industries for services that have usually been regarded as basic to managing a business. In some cases, the whole information management of a company is outsourced, including planning and business analysis as well as the installation, management, and servicing of the network and workstations. For the example, University Kolej Poly-Tech Mara provided Campus Management System (CMS) for student and they bought this CMS from outsourcing from Indonesia. By outsourcing the logistical activities the company can achieve great remunerations. Outsourced environment has been exposed to regularly bring gains in productivity to companies, specifically through scale, technology and expertise. Besides, outsourcing can also help companies reduce costs associated with labour and real estate. Taking advantage of an outsourcing vendor’s global, centre-based dispersed delivery brings advance economies of scale and process proficiency.

Competitive advantage is very important thing especially in term of business marketing because when your business starts growing, the companies should start to think of the potential benefits of going beyond the basics, as larger companies do, and look for ways to use information systems for competitive advantage. (Dr Donald J McCubbrey, Oct 6, 2010). To achieve a competitiv...

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...ks Cited

WNS Global Service, Gaining competitive advantage through analytics outsourcing, 14 October 2009. Available at, http://www.slideshare.net/WNSGlobalServices/kpo-whitepaper-wns-2009, Retrieved at November 2013.

Journal of Accountancy, The Pros and Cons of IT Outsourcing, June 1998. Available at http://www.journalofaccountancy.com/Issues/1998/Jun/antonuci.htm. Retrieved at November 2013.

Journal of IT Management, Volume IV, Number 2, Outsourcing the IS Function, The impact on competitive advantage, 1993. Available at, http://jitm.ubalt.edu/IV-2/article4.pdf. Retrieved at November 2013.

B. A. Aubert, M. Patry, S. Rivard, “Assessing IT Outsourcing Risk”, Proceedings of the 31st Hawaii International Conference on System Sciences, Jan 1998, Available at http://www.scribd.com/doc/6550923/The-Information-Technology-Outsourcing-Risk. Retrieved at Disember 2013.