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THE ADVANTAGES AND DISADVANTAGES OF OUTSOURCING

 

Advantages

(1)Management can focus on the companyís main business activities.

(2)A minimum of 15% savings can be proved in most cases

(3)Access to state of the art information technology

(4)Ability to accurately forecast computerization budget

(5)Dividing up of computerization budget(funding)

(6)No problems with workers unions striking and halting computer operations

(7)Possibility to build a highly efficient computerized department

(8)Construction of a measurable level of service and improved service to the organizational and clients

(9)Improvement of the organizationís financial indicators (taxation, income/assets, human resources/profits ratios, etc.)

(10)Efficient management of computer equipment asses.

 

Disadvantages

(1)Loss of a strategic asset

(2)There are no "real" savings

(3)Fear that the supplier will compromise on a lower level of technology for reducing expenses.

(4)Fear of losing control over information resources and dependence on the service provider

(5)Fear of a leak of sensitive information

(6)Fear of "industriupheaval" and key system personnelís leaving during the process.

(7)Worries about the supplierís stability and survivability.

(8)Lack of control over service levels, possible detrimental effect on service to clients.

(9)"Transitional phase"óa period in which there is significant danger to the organizationís operations.

(10)Fear of its being a "one-way street" with no way back to the beginning.

CASES DIAGRAM