2 Discussions, 1 Case Study

Discussion 1:

Post 1:

 IT Sourcing Criterias

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Discussion

            Key decision criteria that IT managers need to examine to help them make an IT sourcing decision

             IT sourcing is the most problems that IT companies are facing in today’s world. IT sourcing decision making plays a major role in most of the IT companies to hire permanent IT staffs or outsource or have partnership with other outsourcing companies. There are some key decision criteria’s that IT managers can consider in making these decisions.

            1.Flexibility. This criterion has two dimensions which is response time (IT function delivery time) and capability (the range of IT functionality). In-house staff rate high at both dimensions. Insourcing is also a highly flexible sourcing option. Outsourcing can provide the services as like other sourcing options, but outsourcing is available in particular time frame only because of the negotiation in the contract. Partnerships have considered flexibility regarding capability but much less response in time. Partnerships always contribute to create value beyond the organization expectations.

            2. Control. This criterion has two dimensions which is delivery (i.e., ensuring that delivered IT function complies with requirements) and security (i.e., protecting intellectual assets). In-house and insourcing options are favored in case where the work is proprietary, strategic, “below the radar”, or needed immediately. Outsourcing is preferred in delivery option but when it comes to security type of dimension, they are not disclosed with outsourcing companies and their employees. Security plays main role in IT companies to protect their assets which causes very high value damage to entire organization. Partnerships are designed to be self-controlling by the memberships and when it comes to security, they are in the same level of outsourcing but will have little more privilege to less secured resources.  “What is not easily replicable and thus is potentially strategic, is an organization intelligence and capability” (Marquis (2006)).

            3. Knowledge Enhancement.  This criterion deals with knowledge retention but not just with knowledge development (Ross, J. W., and G. Westerman (2004)). If a product is developed by internal IT personnel and if it augmented by contract personnel, knowledge development takes place here, but retention of this developed knowledge is not completely shared with internal IT personnel. It is better to assign a internal personnel time and knowledge to work on that particular product or tool and train other insource staffs with developed internal IT personnel will be helpful to have the knowledge shared and developed within organization which leads to bring more suggestions or ideas towards growth of the organization.

            4. Business Exigency. Business opportunities arise periodically but sometimes IT planning / budgeting are not ready to accommodate those surprise/urgent requirements which companies needs to fulfill by end of the financial quarter. To satisfy this via sourcing options insource/inhouse options is definitely not preferred in this situation because it takes much time to finish the recruitment process and outsourcing is the best option to fulfill these urgent positions which requires specific contractual agreements which can later change to insource through contract-hire roles. Business exigence is a dominant factor and faster sourcing option will take precedence (Smith, H. A., and J. D. McKeen (2015)).

 

References:

Smith, H. A., and J. D. McKeen. “IT in 2015.” Presentation to Center for Information Systems Research (CISR), Massachusetts Institute of Technology, April 2012.

Marquis, H. A. “Finishing Off IT.” MIT Sloan Management Review 47, no. 4 (Summer 2006): 12–16.

Ross, J. W., and G. Westerman. “Preparing for Utility Computing: The Role of IT Architecture and Relationship Management.” MIT Sloan Management Review 43, no. 1 (2004): 5–19.

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Response 1 in APA format with atleast 2 references.

Post 2:

Decision criteria for IT managers to IT sourcing decision.

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· Discuss the key decision criteria that IT managers need to examine to help them make an IT sourcing decision.

There are some key considerations which help IT managers to select the IT sourcing:

Decision Criteria 1: Flexibility - Flexibility is considered in two options: Response time (to determine the delivery of IT product), Capability (ability to deliver IT product). Insourcing is nothing but permanent IT staff which is very flexible sourcing option, Outsourcing has less flexibility compared to Insourcing because, finding an outsourcing with all the skills required, monitoring work is another task. So, partnership is the more flexible option to achieve goals and add value to the organization. (Mckeen & Smith, 2015)

Decision Criteria 2: Control - Control is considered with two dimensions: Delivery (Ensuring that IT delivers all the business needs), Security (Securing the systems). In this case insourcing has more flexibility with respect to work emergency. Outsourcing is preferred when we have a scheduled time of delivery and handled with agreements. Partnerships are tending to be more favored than other options. (Mckeen & Smith, 2015)

Decision Criteria 3: Creative and Operational - Some creative products designing a chip, games mostly compliance products are not outsourced because they have confidential data where as some of the operational products like automation process are outsourced very easily. For all outsourcing decisions a details data specs is required. (Zwilling, 2011)

Decision Criteria 4: Knowledge Enhancement - For every sourcing decision knowledge capture is required. One organization explained with an example of developing new business product by using internal staff (in-house) to transfer knowledge between It team and business team even though they had a change to get outsource staff. Another organization made a decision to train insource staff how to do the work by the internal IT expertise rather than outsourcing the project for cheaper cost. Knowledge development is not only the key factor but also knowledge transfer plays a prominent role, therefore knowledge enhancement is the best component for sourcing decisions. (Mckeen & Smith, 2015)

Decision Criteria 5: Product or Services – Product software development is toughest part after that delivering that product to the customers doesn’t take much effort. Outsourcing these services must be carefully monitored; sometimes the delivered product may not work and may have issues. (Zwilling, 2011)

Decision Criteria 6: Business Exigency - Business opportunities arise intermittently and due to the emergency they do not follow a standard process and decision is made to freeze the opportunity and other decisions are dropped because of the business idea. In this option sourcing can give better results. Due to the immediacy partnership decision will be implemented within the staff. Therefore, business exigency is a key in urgent situations faster the outsourcing option is make better results. (Mckeen & Smith, 2015)

References:

Mckeen, J. D., & Smith, H. A. (2015). IT Statregy. New Jersey: Pearson.

Zwilling, M. (2011, April). Six Key Factors in the Right Outsourcing Decision. Retrieved from Business Insider: https://www.businessinsider.com/six-key-factors-in-the-right-outsourcing-decision-2011-4

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Response 2 in APA format with atleast 2 references.