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OUTSOURCING CASE STUDY: THE CASE FOR OUTSOURCING

 

The New Role of Outsourcing

Buried in Paradigm Shifts

If you enjoy running like crazy just to stay behind, you should consider a career as an information technology(IT) manager. Posted at the front lines of the computer revolution, IT manager have had to absorb a rapid succession of paradigm shifts, any one of which would have been considered earth shaking by itself, but which taken together are the IT equivalent of being hit by the comet.

Small is Worse

Smaller companies(less than $1 billion in annual revenue) are in an especially tough predicament. As a percentage of revenue, IT budget for small companies are more than four time higher than the budgets of medium sized companies and more than eight times higher than those of the largest companies. For these beleaguered small companies—i.e. for most companies—the cost of building up a self-sufficient internal IT staff would be prohibitive even if the right personnel were available.

A New Outsourcing Paradigm

The IT resource draught has sparked yet another paradigm shift, this one in use of outsourcing. Outsourcing simply means resorting to outside experts to provide IT services that used to be handled internally. As Gartner Group puts it: Today, outsourcing IT(and other business functions) is being viewed as a routine mechanism for successful organizations to stay competitive.

Allin has refined a model for outsourcing that avoids the most common traps and reinforces the factors the factors that lead to success.