Outsourcing

Types of arrangements for managing resources are as follows

- Inhouse
- Outsourced
- Cosourcing
- Partnership
- Colocating

Main reasons/justifications for outsourcing;

• Savings (Cost)
• OpeX (Accounting, Cashflow)
• Flexibility (Quality)
• Take advantage of new technologies
• Core Competencies (Quality)
• Speed of deployment (Time)
• Scalability (Quality)

Barriers to changing apps internally

• Familiarity
• Inevitability of bugs, patches,
• Training

Hardware, software (Software as a Service - SaaS), network management (Platform/Infrastructure as a service PaaS/IaaS) and people can be outsourced. Outsourcing companies can be called XSPs meaning external service providers.

Application Service provider, Internet Service provider, Management service provider.

Things to consider

- Strategic value of IT to the organisation
- Future needs
- Transition costs
- Feasibility of separating IT (or elements of it) from the business
- Existing human resources

The next section is how to manage outsourcing arrangements effectively.