chapter  23
21 Pages

Evaluating the Information Technology Outsourcing Option

WithKenneth Harnisch

In the world of information technology (IT) management, outsourcing presents an opportunity for the large and stable company to make sense of a truly remarkable revolution in technology, products, and services. The client-supplier partnership is vital to the success of any outsourcing arrangement, but it involves great risk. For the client organization, understanding the specific cost elements involved in outsourcing decisions is critical to understanding the process of cost control. For the client, the benefits of outsourcing include the following considerations for high-end managers of the business: Outsourcing support organizations make the core business more attractive to potential "mergers and acquisitions" suitors; Outsourcing is preferable to downsizing; Outsourcing cost centers improve the prospect of measuring true contribution of profit centers in remaining business; Outsourcing forces a tighter linking of business strategy and IT via the necessity to "vendor manage" the outsourcer.