Competitive Advantage through IT Outsourcing

Task 1

Question 1

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

Competitive advantage occurs when an organization acquires or develops an attribute or combination of attributes that allows it to outperform its competitors. These attributes can include access to natural resources, such as high grade ores or inexpensive power, or access to highly trained and skilled employees. New technologies such as robotics and information technology can provide competitive advantage, whether as a part of the product itself, as an advantage to the making of the product, or as a competitive aid in the business process.

There a lot of advantage in outsourcing the Information system or Information technology to company. To make a company a great organization, there must have a good system to manage and control the whole organization. Not all organization has a specialty in Information System or Information Technology, so the best way to solve this is to outsource the job to expert.

For the example, if company outsources their information system or information technology to other company or person that more familiar in that work, the organization will save more money and time to hired a new employee in IT department. Besides that, not all new employee expert in information system or information technology. If the employee do something wrong with the system, the whole organization will down if the downtime took much time more than uptime.

Company also can focus to market their product and focused on their main business. For the information system of the company, they will outsource their work to the expert to get more efficient system....

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...to the competitor of the organisation, the organisation will loss the profit and can make the whole organisation going down.

D. Quality

• Even though the organisation already sign a contract to outsourcing company, the outsourcing company need to get a profit by make a job. So, to get a system, the organisation must pay according to the contract but if the organisation need a better quality of the system, they need to pay additional costs. It will make the organisation loss the advantage in business organisation. Besides, the additional cost will be much higher.

Task 2

Royal Bank of Scotland is a giant banking company in United Kingdom. This bank was hired a junior technician from India to upgrade their software. Unfortunately, when the system in the upgrade schedule, this junior technician was accidently delete the information of transaction in the bank.