IT OUTSOURCING
Current scenario and analyzing the roadmap
Abstract
This term paper envisages analyzing the current scenario of IT outsourcing and reveals the paradigm shift in the outsourcing landscape. IT outsourcing has witnessed continued popularity, as this market now accounts for 67% of all global outsourcing deals with current IT services market at $746 billion.
Several studies have identified the reasons for IT outsourcing as a closer focus on the core business, the rapid introduction of new products, cost reduction, the increased access to technical expertise, and the lack of required resources or expertise to develop or maintain the information system internally However, in today’s scenario it is being linked to the firm’s business strategy and several frameworks have been identified for aligning the outsourcing to the growth strategy.
Introduction
Outsourcing is the activity of contracting other specialized companies to perform the business processes that organizations can’t or do not wish to undertake themselves. Traditionally, IT outsourcing has been of the form wherein an external service provider is engaged via a formal contract to deliver part or all IT functions to achieve specified results. The contracts are usually for a fixed price and for a specified period of up to ten years. Services that are outsourced vary greatly, being based upon the requirements of each organization. These services include IT service/help desk, LAN/WAN management, mainframe operations, web hosting and application management and support. Generally, outsourcing contracts have not usually included business process design, IT security policies, or strategic planning, as many organizations see these aspects as critical to their business.
However, IT Outsourcing has become an integral component of corporate strategy in today’s business scenario. A major reason organizations outsourced their IT activities in the past was to reduce their high cost of application...