Itm432 Case Assignment Module 4

ITM 432 Case Assignment Module 4

Financing Organizational Technology

Charles P. Peterson

TUI University

Dr. Terrill Frantz

Financing Organizational Technology

Introduction

Outsourcing is increasing at a rapid rate in the United States, Europe and Asia because organizations view outsourcing as a way to achieve strategic goals, reduce costs, improve customer satisfaction and provide other efficiency and effectiveness improvements (Klepper & Jones). Every business now relies on information technology (IT) to help provide services or deliver products to the marketplace. IT is now acknowledged to be more strategic than ever, increased market competition, more demanding customers, tighter margins and shorter product life cycles have caused businesses to focus better on core competencies, reduce risk and costs, and become more agile and competitive. For many companies and small businesses across all industry segments, outsourcing IT is the only answer (Outsourcing: The Ground Rules How to make outsourcing a win-win situation).

Effectively evaluating IT outsourcing decisions

To meet the challenges, organizations are finding outsourcing a better option. IT outsourcing is when an organization gives the task to a service provider to perform an IT function for them, the service provider is a third party. Many types of IT Services can be outsourced. The management can outsource for several reasons, it can be operational, technological or financial. Operational conditions can be to improve service quality, develop and maintain robust systems, reduce the efforts for businesses. The technological benefits may include, achieving IT efficiencies, access to better processes and technology, being up to date with the changing technology and improving the quality of IT services. The financial reasons are to lower IT costs and minimize the risk of investing in the wrong technology (It Services And Outsourcing). Like any business decision, outsourcing is not risk...