A Case For Insourcing Essay

685 words - 3 pages

Outsourcing IT functions has grown exponentially over the last few decades. As organizations grow they find that the IS management becomes a larger and larger part of their day to day operations. In order to save money and focus solely on their core competencies many companies outsource their IT departments to off shore organizations that say they can provide the same service at a lower cost. However many times encumbrances arise from these partnerships such as cultural barriers, talent retention, and loss of in house competencies (Dhar & Balakrishnan 2006). These problems can be avoided by keeping their IT department in-house. By keeping their IT department in house businesses can better manage their information system costs and utilize the internal talent to ensure their systems remain competitive in the future.
“Country specific cultures can add risk in global outsourcing. Language and work ethics vary from country to country and that may contribute to risk” Dhar & Balakrishnan 2006 . Many of the countries that offer remote IT support such as China and Eastern Europe have very bad track record with intellectual property security. By using companies in these regions an organizations proprietary information can be taken and used by their competitors without their knowledge or permission. In the event that a company’s intellectual property is taken the legal systems in the regions may have a different view than US courts as to who owns that information. By investing in a strong internal IT departing these issues can be avoided and an organizations intellectual property can remain safely behind their own firewall.
Another issue with outsourcing is talent retention. Personnel that are familiar with an organizations structure and processes can be very difficult to replace. It takes time to learn how an organization operates what processes need to be supported by their IS. When organizations outsource they must keep in mind that they now lose the ability to retain key personnel that have developed an understanding of how their business operates. If these key individuals walk out the door their knowledge of the organization goes...

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