...Outsourcing Risks of Information Technology 07 January 2013 CMGT 442 Pro's and Con's of Outsourcing Information Technology The cost of maintaining an informational technology department rises tremendously each year. The replacement of parts, the increase of service agreement, personnel raises, and new mandates from local and federal governments. By outsourcing some internal functions you immediately save money by managing services. Though there are a wealth of benefits to be gained through outsourcing only the services that you require there are inherent risks that accompany that given choice. If exploited any one risk can ruin all the benefits of outsourcing your internal company functions. We will explore any and all risks that may be inherented with outsourcing rolls such as data storage, payroll, human resources, sales order taking, and finally desktop and network support. The first important action before committing to outsourcing your data storage is to address a series of questions that are contained in a Records Management Risk Assessment checklist. These questions will remove assumptions and provide a better detailed course of action on how your data should be stored, what data will be stored, and address if any local or compliance laws may be in question. Company Compliance risks: 1. Can my data be stored outside my jurisdiction? 2. Is Audit Management sufficient enough in this instance...
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...Possible risks of outsourcing There is no way around protecting from all known risks from outsourcing but there are certain items that can help slow down the issue. There are going to be times when recommendations will not be accepted or appealingly to certain situations. We will go on and explain different risks that may or may not occur and some recommendations for different risk mitigation strategies. External service provider for data storage There are different types of people that want an easier way to store data and this is where flash drives com into the scene. The flash drives are small enough to carry with you and store data from your computer to bring with you everyone. A flash drive can hold up to 16 GB of data which is very convenient for college students or people who work for a big firm. There are also a lot of risks involved when handling a flash drive. For an example of the risks involved for using an external device is as followed; * Stolen - Someone stealing your flash drive that might have sensitive data from your company on it is a major risk. * Lost - Since the flash drive is very small and it is very easy to carry with you but because of the size it is also very easy to lose. * Damages (external) - Being damaged is very easy to a flash drive since it is very small in size. Being damaged also means the data can also be damaged or lost. Also forgetting about your flash drive in a pants pocket and then having...
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...Risk Analysis for Outsourcing Decisions Linda Duvall CMGT/442 Mr. Thomas Maricle February 23, 2011 Abstract The purpose of this paper is to identify the possible risks to an organization in each of the following outsourcing situations: a) the use of an external service provider for your data storage; b) the use of an enterprise service provider for processing information systems applications such as a payroll, human resources, or sales order taking; c) the use of a vendor to support your desktop computers; and d) the use of a vendor to provide network support. The paper will include a risk mitigation strategy for each situation. Risk Analysis for Outsourcing Decisions “Outsourcing”, as defined by Wikipedia, the free encyclopedia, is the contracting out of a business function to an external provider. In this sense, two organizations enter into a contractual agreement involving an exchange of services and payments. Paul Strassmann, in his paper “The Squandered Computer” would prefer the term “out-tasking” because one organization is utilizating the specialization of another organization. According to “Microsoft Business for Small and Mid-Size Companies”, small business owners are outsourcing a range of services, from Human Relations to finance and accounting to customer services. Small businesses can now tap outside facilitators for a much greater range of services. As an example, entrepreneurs with strong sales often assume a full-time...
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...Services: Risk Assessment What is RISK? Risk is the probability of an undesirable event. The probability of that event and the assessment of the events predicted harm must be put into a believable outcome or scenario this will combine the set of risk, reward and regret probabilities into a predicted value for that outcome. Risk is defined as a function of three variables: 1. The probability that there is a threat. 2. The probability that there are vulnerabilities. 3. The potential impact. What is risk management? Risk management is the means of balancing the costs and benefits of any business decision. The risk management process involves identifying, analyzing, and taking steps to eliminate or reduce the loss faced by an organization or individual. Risk management utilizes many tools and techniques, including but not limited to insurance, to manage a wide variety of risks. All businesses encounter risks, some of which are predictable and controllable, and others which are unpredictable and uncontrollable. Risk Management is particularly vital for any business. Common types of losses—such as theft, fire, flood, legal liability, injury, or disability—can destroy in a few minutes what may have taken the company years to build. Such losses and liabilities can affect the day to day operations, reduce profits, and cause financial hardship. These hardships can be severe enough to cripple or bankrupt a company. Through proper Risk Management...
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...meet new quality reporting standards, empower patients and serve as the backbone of emerging care delivery and payment reform models. Meaningful Use part 1 has come and gone with the implementation of Electronic Medical Records (EMR). Meaningful Use part 2 and part 3 are heating up as portals, imaging and storage requirements are the latest requirements in scope. As part of Meaningful use stage 2 rolls out larger image workloads will cause networks to slow down and stall (Bolan, 2013). Information Technology and outsourcing potentials are the areas of discussion for this risk analysis briefing. Of particular interest are resolving server data and energy costs increases, potential security breaches and hacker vulnerability, storage of medical images and disaster recovery of images after a natural disaster. Finding solutions for these issues will come with risks that will need to be identified and analyzed to determine best response and a plan to monitor. Risk Identification First on the list to address are issues relating to server and energy costs, storage of medical images, maintaining security and disaster recovery. The volume and length of time data and images are required to be stored long term as required by the HITECH Act threatens to quickly surpass existing storage capability. Primary servers, back-up servers, racks and other equipment maintenance and repair are costly since these are replaced and upgraded every few years. Also only 50 percent of...
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...Benefits vs. Risks of Outsourcing IT Services Benefits Vs. Risks Of Outsourcing IT Services The Chron article, “Benefits vs. Risks of Outsourcing IT Services” focuses on the benefits and risks associated with outsourcing information technology (IT) and services. It also suggests that businesses carefully weigh the benefits and risks of outsourcing their IT functions. The article cites four benefits and three risks that are commonly associated with outsourcing IT services. The benefits include: 1) Saving money. This is one of the most important reasons why companies choose to outsource because it frees up capital for business operations that directly produce revenues. 2) Controlling expenses. Outsourcing functions to businesses that specialize in IT services reduces internal operating costs and allows for more competitive pricing of goods and services. 3) Focus on Core Operations. This allows managers to focus on business goals and objectives without splitting time and energies outside of their competencies. 4) IT Resources Near Those of Big Businesses. Outsourcing IT functions allows small businesses to gain more equitable cutting edge technology and services that are comparable to large businesses. Conversely, the author cites the following risks associated with outsourcing IT: 1) ‘Dubious Accessibility’. The company may experience lengthy downtime during caused by system failures, which are likely to result in loss of money and productivity. 2) Loss...
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...Running head: Outsourcing Characteristics Outsourcing Characteristics Name CMGT 578 23 September 2013 Professor Scott Goodman Outsourcing Characteristics In this paper, the Outsourcing features will be talked about in great deal and the features will consist of what are the influential aspects in a company determining to outsource. One reason that most companies select to outsource is that they have a prospect to reduce needless expenditure. In addition, the risk engaged in outsourcing will also be reviewed, this risk is that company information is no longer confidential and the partners you selected to outsource currently to have access to all the company information. Faith and professionalism is significant in selecting to outsource to a partner. The advantages of outsourcing will also be conferred in this paper as well. I will explain in detail the method following outsourcing and the company following outsourcing. When establishing whether a company is supposed to, they contemplate many elements and one may be nothing, but the cost cutback. This also has an effect on estimate timelines, project timelines are decreased and the labor cost is cheaper. Many companies that decides to outsource their business because the pay rate is considerably lesser in the region where they would contract out their job. Another deciding element is in the assessment to subcontract the company, they do not have to employ consultant or experts...
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...Adversity of Outsourcing: Outsourcing from the Employee’s Perspective Schillen & Steinke Mitigating the Adversity of Outsourcing: Outsourcing from the Employee’s Perspective Sarah J. Schillen Seattle Pacific University USA sschillen@gmail.com Gerhard Steinke Seattle Pacific University USA gsteinke@spu.edu ABSTRACT This paper explores how outsourcing activities and decisions put the well-being of the remaining employees at risk, ultimately affecting productivity and creating further costs to the employer. It highlights four potential threats to remaining employees: trust, job satisfaction, motivation, and stress. The paper provides several suggestions for mitigating these impacts, including communication to retain trust, acting ethically to ensure satisfied employees, seeking an understanding of employee perspectives to build employee motivation, and providing good planning along with training and development to reduce employee stress. INTRODUCTION Globalization provides organizations with more options than ever before. Business leaders are continuously encouraged to adapt, reevaluate, and strategically improve processes and approaches. Best practices are reinvented rapidly in attempt to keep up with market trends. The quest to recognize new methods for increasing revenue has become the inspiration for exploring new management techniques and strategies. One such rising trend in the advent of global markets is that of outsourcing. Common purposes for outsourcing include improvements...
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...This paper describes the situation at the United States (US) based company, Global Communications (GC) in the telecommunication industry. Different challenges and opportunities at GC are discussed. The paper continues by discussing the different stakeholders' perspective/ethical dilemmas and continues by framing a problem statement for the Global Communications situation. An expected end state situation is then described for GC scenario. The paper continues by analyzing different alternative solutions to the Global Communications situation , the risk for each solution is described and an optimal solution from a numbers of alternative solutions is selected. An implementation plan for the selection solution for the Global Communications situation is described and a metrics to monitor the plan is presented. This paper concludes by reviewing the selected solution to the situation and discussing the expected result. Issue and Opportunity Identification As a result of competition from cable companies, the United States based company, Global Communication (GC) is losing market share and profitability in the telecommunications market. The traded stock value has dropped from $28 to $11 in a two year period and stockholders are receiving diminishing returns (University of Phoenix, 2006). The stockholders have lost confidence in the management. Management is under pressure to renew stockholders confidence by increasing returns on the stock and the traded stock value. Senior management...
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...Running head: FACTS ABOUT OUTSOURCING 1 The Facts about Outsourcing Lawrence Smith Professor Barron Columbia College FACTS ABOUT OUTSOURCING 2 Abstract Globally, businesses have undergone unprecedented changes because of technology, the internet, and improved educational systems around the world. There are so many moving parts to having a successful business; nowadays, many organizations are outsourcing their non-core activities to external agents. Outsourcing is becoming an increasingly accepted practice for both small and large businesses of today. Outsourcing has quietly grown into a standard operating procedure for many organizations. This rising use of outsourcing represents a paradigm shift in the way companies conduct business. In today’s business environment, every company is looking for ways to reduce costs. Many are now turning to outsourcing as a weapon in their cost-cutting arsenal. But outsourcing is about more than shrinking budgets and reducing headcount. This paper will explain the term outsourcing and address why organizations prefer to outsource some of its functions in today’s business environment. Also, discussed in this paper will be the advantages and disadvantages of the outsourcing process and its rewards and risks towards the organization. FACTS ABOUT OUTSOURCING 3 The Facts about Outsourcing The word outsourcing could be described as the contractual relationship with a specialized outside service provider...
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...Impact of Outsourcing in improving productivity in modern Organizational Introduction In today’s world of ever increasing competition, organizations are forced to look for new ways to generate value. The world has embraced the phenomenon of outsourcing and companies have adopted its principles to help them expand into other markets (Bender 1999). Strategic management of outsourcing is perhaps the most powerful tool in management, and outsourcing of innovation is its frontier (Quinn 2000). Outsourcing is a management strategy by which an organization delegates major, non-core functions to specialized and efficient service providers, or as Corbett (1999). President of Michael F. Corbett and Associates asserts, Outsourcing is nothing less than the wholesale restructuring the corporation around our core competencies and outside relationships. The traditional outsourcing emphasis on tactical benefits like cost reduction (for example, cheaper labor cost in low-cost countries), have more recently been replaced by productivity, flexibility, speed and innovation in developing business applications, and access to new technologies and skills (Greer, Youngblood, and Gary 1999; Bacon 1999). The market for providers of outsourced services of all types is growing rapidly. In 1996, American firms spent over $100 billion in outsourced business activities (Casale and Overton 1997). Other estimates place the total U.S. market for outsourcing at more than $300 billion by the year 2001 (Dun and...
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...Doctoral Proposal: Exploring the Impact of Outsourcing on a Government Agency By CHARLES KIMANI A Dissertation Presented in Partial Fulfillment Of the Requirements for the Doctorate. Doctor of Management in Organizational Leadership with a Specialization in Information Systems and Technology. University of Dedan Kimathi School of Technology September 2013 Table of Contents CHAPTER 1 - INTRODUCTION ......................................................................................................1 Introduction ..................................................................................... .......................................1 Background of the Problem.............................................................................................................. 2 Problem Statement...................................................................................................................... 4 Purpose Statement ........................................................................................................................5 Significance of the Study......................................................................................
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...Supply Management Outsourcing Purchasing is common to all organizations with any kind of supply function. It is one of the basic processes of supply management. As time has gone by, the term ‘purchasing’ has taken on a broader definition. As companies become more independent, more competitive, and start growing towards the future in technology, specifically e-commerce, purchasing becomes a strategy. Purchasing became “strategic sourcing.” Strategic sourcing has become a huge responsibility for the supply manager. There are a few activities that strategic sourcing accomplishes for the manager. It allows the manager to strategize the spending habits of the company, it forces the manager to strategically look in to the supply market for any changes, trends, and what other firms are offering, and it provides a method to develop a sourcing strategy that fits the company’s strategy to lower costs and risk, while bringing in a profit. Profit is produced through mastering or at least competently managing the five M’s; machines, manpower, materials, money, and management. Part of that strategy is where and how to source these 5 M’s that will meet the cost strategy of the company. This brings up the most strategic question a firm can ask of a supply manager; to make or buy? To meet the company’s needs that will consequently meet the current demand, should the company in-source or outsource? What should the company outsource? What are the functional areas of supply management...
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...Perceived Impact of Outsourcing on Organizational Performance Dean Elmuti, Eastern Illinois University Introduction In todays world of ever increasing competition, organizations are forced to look for new ways to generate value. The world has embraced the phenomenon of outsourcing and companies have adopted its principles to help them expand into other markets (Bender 1999). Strategic management of outsourcing is perhaps the most powerful tool in management, and outsourcing of innovation is its frontier (Quinn 2000). Outsourcing is a management strategy by which an organization delegates major, non-core functions to specialized and efficient service providers, or as Corbett (1999). President of Michael F. Corbett and Associates asserts, Outsourcing is nothing less than the wholesale restructuring the corporation around our core competencies and outside relationships. The traditional outsourcing emphasis on tactical benefits like cost reduction (for example, cheaper labor cost in low-cost countries), have more recently been replaced by productivity, flexibility, speed and innovation in developing business applications, and access to new technologies and skills (Greer, Youngblood, and Gary 1999; Bacon 1999). The market for providers of outsourced services of all types is growing rapidly. In 1996, American firms spent over $100 billion in outsourced business activities (Casale and Overton 1997). Other estimates place the total U.S. market for outsourcing at more than $300...
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...Italian Quality: Campagnolo Bicycle Components Introduction Campagnolo is renowned for producing some of the most innovative, highest quality, and best performing bicycle components available today. They also provide a benchmark for original design as evidenced by winning the prestigious Compasso d’Oro award from the Associazone Design Italiano and has been recognized by the Wall Street Journal as one of the most prominent sports brands in the world. ‘This reputation has been earned not only through its countless racing successes, but also by virtue of the attention given to quality and to service that sets this company apart from all others.’ ("Focus," 2011, para. 6) Tullio Campagnolo, an amateur bicycle racer who was frustrated with current technology to change gearing on his bicycle, founded Campagnolo S.r.l in Vicenza, Italy in 1933. At the time, changing gears required the rider to dismount, remove the rear wheel and then flipping the rear wheel around so a different sized cog on the opposite side of rear wheel could be used, then reattach the wheel to the bicycle frame, and finally remount the bicycle and resume the race. This required tools and a bit of time off the bicycle to complete as derailleurs and quick releases had not yet been invented. Tullio Campagnolo spent three years designing, perfecting, and producing what has become one of the ubiquitous components on a modern bicycle – the quick release skewer. ‘The company soon expanded, focusing on the three...
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