Outsourcing: a Misinterpreted Subject

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What are the advantages and disadvantages of looking outside the company to manage and support IT? Outsourcing proponents cite several reasons for choosing outside vendors. Access to state-of-the-art technology. The volatility of information technology can quickly make IT skills obsolete. Software is updated and replaced very rapidly--by the time an entity invests in and trains its full-time staff, the technology may no longer be state-of-the-art. Outsourcing specialists must be well trained and up-to-date to survive. Cost savings and quality. Fierce competition has led many businesses to restructure and downsize staffs in an effort to save money. As in the case of General Electric, even thriving companies do whatever possible to reduce staff and costs. Vendors may save money because they * Have much tighter control of fringe benefits and run much leaner overhead structures. * Use low-cost labor pools more aggressively and, with the help of modern telecommunications, can move data centers to low-cost areas. * Apply world-class standards to the company's existing IT staff, all of whom have to requalify for appointment at the time of outsourcing. * Can employ more effective bulk purchasing and leasing arrangements for all hardware and software. * Have better control over software licenses because they often are more informed negotiators. * Must meet deadlines because of contractual pressures.

Flexibility. Companies must be flexible enough to adapt to a business environment in constant flux, so their IT functions have to respond quickly to changing demands. Vendors often can tap a wide range of resources, skills and capacities while internal IT staff may have limited capabilities. -------------------------------------------------

Job security for regular employees. Companies often hire outsourced staff with the understanding they'll be employed for a limited time. Thus, they can more easily drop or add people to the workforce without jeopardizing...
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