The outsourcing of information system or information technology functions has become a common business practice for small and large company alike.
Software or IT outsourcing can be defined as the significant contribution by external vendors in the physical and or human resources associated with the entire or specific components of the IT infrastructure in the user organization. The word outsourcing finds it roots in the words ‘outside’, ‘resource’ and ‘using’. It reflects the use of external agents to perform one or more organizational activities.
Software outsourcing and business service are large and fast growing sectors globally. The outsourcing involves hiring a third part company or service provider to perform software related activities, such as application management and application development.
Outsourcing success can be viewed as the level of fitness between the customer’s requirements and the outsourcing outcomes. The benefits are enormous. Software outsourcing eliminates all the headaches of the sheer administrative burden of maintaining essential software, the deployment of new project IT, the ongoing upgrades, the sourcing of scarce IT staff, and the employee or consultant costs.
Often-cited benefits of the IT sourcing include improved core business performance, improved IT performance (due to the vendor’s expertise) and reduced IT costs.
Combined with technical staff of the host’s staff, this results in negligible downtime and increase productivity. Users always have the latest version of the software. And the uptake of this model is increasing.
Eventhough the outsourcing of the IT infrastructure is not new, but the traditional model is changing, as software delivered as a service using Internet technology is the next logical step. By providing software applications like a utility can better manage the distribution of their resource.
By moving IT facilities offshore to low-labor costs areas and/or through economies of scale, the vendor can perform the outsourced function more cheaply than the client firm could have otherwise.
IT Outsourcing
