It Outsourcing

Outsourcing Information Technology Definition & Purpose Outsourcing information technology is a transfer of a company’s IT services to a third party that specializes in the field. These services include operations at data processing facilities, software application and website management, business recovery and disaster recovery, PC management and help desk operations, and telecommunication and network operations,just to name a few. The main reason for outsourcing IT used to be to simply cut costs. However, more companies outsource to free up the time spent on IT and focus on the firm’s core mission or core competencies. In the US, the most common area for firms to outsource is their IT. The following table shows a breakdown of the common areas for firms to outsource. {draw:frame} {draw:frame} Advantages of Outsourcing As mentioned the top reasons companies might look into outsourcing their IT services is to cut costs and focus on what they do best. However, there are a number of other benefits for a company. Companies who outsource are able to gain access to world-class capabilities. World class providers make sizable investments in technology, methodologies and people. They gain expertise by working with other clients facing similar issues and challenges. Another benefit is that it can free resources for other purposes. Every organization has limits on the resources available. Outsourcing allows an organization to redirect their resources (most often people) from non core activities toward activities which serve the main purpose of the organization. Reducing risk is a benefit which is very attractive to an organization. As we all know, tremendous risks are associated with the investments an organization makes. IT can account for a large portion of the investments a firm must make, and with technology constantly changing, keeping up with it can be a challenge. By outsourcing IT, the risk of making large investments and keeping up with the latest technology...