By Ian Tho
This ebook indicates IT managers the right way to establish, mitigate and deal with dangers in an IT outsourcing workout. The e-book explores present developments and highlights key concerns and adjustments which are happening inside outsourcing. cognizance is given to opting for the drivers and comparable hazards of outsourcing via studying lately released and current suggestions of IT outsourcing.
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Extra info for Managing the Risks of IT Outsourcing
The decision is not easy to make as the elements involved in the decision-making process are often varied and peculiar to the specific environment and organizational needs. There are, however, commonalities that often form the main reasons why organizations choose to outsource the IT function to a third-party supplier. These commonalities primarily derive from opportunities to benefit from specialization and then from economies of scale and economies of scope within the context of the IT function.
The keiretsu model mirrors many outsourcing partnership models that have been put together. From here, however, the concepts seem to diverge. e. Mitsui, Mitsubishi, Sumitomo, Fuyo, Sanwa, and Dai-Ichi Kangyo Bank groups. qxd 3/1/05 12:29 PM Page 30 Managing the Risks of IT Outsourcing most often described are the vertical and horizontal keiretsu. The vertical keiretsu are industrial groups connecting manufacturers and parts suppliers or manufacturers, wholesalers and retailers. Examples of the vertical keiretsu include Toyota, Nissan, Honda–Matsushita, Hitachi, Toshiba and Sony.
There are significant differences between the attributes of a sourcing contract and those of an outsourcing contract. However, various features encompass the contract mechanisms for both these concepts. When the price of the services is considered, often there are no ‘market rates’ for long-term contracts, especially with ITO, but often a negotiation process takes place. In an outsourcing deal, this is structured into a contract where possible formulae form the basis for pricing. In an outsourcing arrangement (versus a sourcing deal), the supplier typically is given a contract covering a long period of time (possibly 5 to 10 years) to deliver agreed outcomes over this period.
Managing the Risks of IT Outsourcing by Ian Tho