What is IT outsourcing strategy? - Definition from WhatIs.com

An IT outsourcing strategy is a plan derived from assessing which IT functions are better performed by an IT outsourcing service provider than by an ... Home Apps,infrastructureandoperations ERP IToutsourcingstrategy Sharethisitemwithyournetwork: By LindaTucci, LindaTucci,IndustryEditor--CIO/ITStrategy Aninformationtechnology(IT)outsourcingstrategyisaplanderivedfromassessingwhichITfunctionsarebetterperformedbyanIToutsourcingserviceproviderthanbyanorganization'sinternalITdepartment. AnIToutsourcingstrategycanrequireinputfrommanydepartments,includingoperations,legal,supplychainandhumanresources.TheresponsibilityfortheoutcomeofanIToutsourcingstrategy,however,usuallylieswiththeorganization'schiefinformationofficer(CIO). Formanyorganizations,thegoalofanIToutsourcingstrategyistoprovidethebestpossibletechnologytotheorganizationatthelowestpossiblecost.Whatconstitutesthebestpossibletechnologyandlowestcost,however,tendstobefluidduetorapidlyevolvingtechnologiesandmarketvolatility. Costsavings,however,isnottheonlyaimofanIToutsourcingstrategy.Someorganizationslookingforbusinesstransformationrelyonoutsourcingproviderstohelpthemthroughtheprocess.Evenonthisfront,IToutsourcingstrategyischanging.WhereasinthepastorganizationsoftenusedonelargeITserviceprovidertohandletheentireproject,outsourcingstrategiststodayrecommendtakingamulti-vendorapproach. EconomicdownturnssharpentheneedtoreduceITcostsandalsoshakeuptraditionalIToutsourcingdeliverymodels.Thetechbustof2001to2003,forexample,increasedtheadoptionofoffshoring,thatis,theexportofITworktoplacessuchasIndia,wherelaborissignificantlycheaperthanindevelopedmarkets,suchastheUnitedStatesandWesternEurope.Muchoftheworkinitiallysentoffshorewasconsideredrote,requiringlow-levelITskillsthatwereeasilytaught.Asdemandforoffshoreoutsourcinggrew,sodidthematurityofoffshoreproviders,requiringIToutsourcingstrategiststocontinuallyreassesswhichITworkissuitabletosendoffshore. Therecessionof2008-09alsoaffectedIToutsourcingstrategy.TheacuteneedtocutITcostsatmanyorganizationsspurredinterestinthepotentialcost-savingspromisedbycloudcomputing,generallydefinedastheon-demanddeliveryofcomputingservicesaswellasinfrastructureovertheInternet,onapay-per-usebasis.Theabilityofemployees,includingnon-ITpersonnel,toprocuretechnologywithoutgoingthroughITdepartmentscanundermine,orataminimum,complicateanIToutsourcingstrategy.Inaddition,thecost-benefitanalysisforoutsourcingITfunctionscanbeconfusingwhentheoutsourcedtechnologyorserviceisbilledonafluidpay-per-usebasis.  Seealso:businessprocessoutsourcing,domesticoutsourcing   ThiswaslastupdatedinSeptember2011 ContinueReadingAboutIToutsourcingstrategy Sixquestionsforbuildinganeffectiveoutsourcingstrategy WhatdoesgovernancehavetodowithagoodITOdeal? RelatedTerms multisourcing(multi-sourcing) Multisourcing(multi-sourcing)isanapproachtooutsourcinginwhichIToperationsandtechnologyinfrastructurearecontracted... See complete definition strategicplanning Strategicplanningisaprocessinwhichanorganization'sleadersdefinetheirvisionforthefutureandidentifytheir... See complete definition supplychainvisibility(SCV) Supplychainvisibility(SCV)istheabilityofparts,componentsorproductsintransittobetrackedfrommanufacturertofinal... 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