Investigate the possibility of outsourcing the TIMS system. List the options, together with advantages and disadvantages of each.

Question

What will be an ideal response?

Answer 1

Students should list various outsourcing options that transfer information systems development, operation, or maintenance from in-house staff to an outside firm that provides these services, for a fee, on a temporary or long-term basis. The main outsourcing options include application service providers and Internet business services. Students should be able to cite various pros and cons of each option. For example, if a company uses an ASP to supply a data management package, the company does not have to design, develop, implement, or maintain the package. Also, an IBS solution might be attractive because it offers online data center support, mainframe computing power for mission-critical functions, and universal access via the Internet. In addition, outsourcing can be attractive to a company whose volume fluctuates widely, such as a defense contractor.
On the other hand, when a company decides to outsource IT functions, it is taking an important step that can affect the firm’s resources, operations, and profitability. Mission-critical IT systems should be outsourced only if the result is a cost-attractive, reliable business solution that fits the company’s long-term business strategy. In addition, outsourcing can raise some concerns when a company must turn over sensitive data to an external service provider and trust the provider to maintain security, confidentiality, and quality. The chapter suggests that before outsourcing, a company should review issues relating to insurance, liability, licensing, information ownership, contract terms, security, intellectual property rights, warranties, and disaster recovery.
Students also might note that outsourcing relieves a company of the responsibility of adding IT staff in busy times and downsizing when the workload lightens. On the other hand, a major disadvantage of outsourcing is that it raises employee concerns about job security.