THE WHAT, WHY AND HOW
OF
OUTSOURCING INFORMATION
SYSTEMS
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Company strategic priority : more focused on
service, quality and operational excellence.
Successful companies: management able to confront
and cope with anomalies and contradictions.
Management excellence can separate :
- executive “go with the flow” (the contradictions
inherent to company strategies)
- executive can develop creative solutions to tough
dilemmas.
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Alert executives : outsource information systems
responsive to their rapidly changing
requirements.
Operational excellence strategy : to develop the
line manager capacity and motivation to use
systems to enhance performance.
Less successful companies : manager ignore the
need for fine tuning and walk away from
information technologies issues.
OUTSOURCING AS THE OBVIOUS
ANSWER
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Technology problems, costs, future requirements,
lack of unique expertise --- solutions experience
outsider.
Business actions  computer-based contribution
 budget increased in hardware and software
Weakness :
- management unease on volatile technologies
- investment doesn’t pay off
- occasional failure
- rapid obsolescent
OUTSOURCING AS THE OBVIOUS
ANSWER

Outsourcer (external service providers)
become the critical resources :
- development more powerful new systems
- enhancing (or fixing) existing systems
- operating some or all components of company
information systems

IS more from back office to front office
OUTSOURCING AS THE OBVIOUS
ANSWER

Mainframe computers (“back office”
computers)  provide transaction
processing, record keeping  flexible,
adaptable information systems (easy
access to data, customized analytical
tools, integration of information in diverse
data banks)
THE NEGLECTED SIDE OF
OUTSOURCING
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Management can’t outsource its responsibility to
systems
Management should play major roles if
outsourcing is going to meet company
expectations and objectives
Information systems are part of core of any
business and critical inputs from business
managers are required both in their design and
operations.
THE NEGLECTED SIDE OF
OUTSOURCING
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Information technology is the heart of company
efforts to promote faster adaptation, innovation,
cost reduction and stressing to customer
satisfaction
The combined effect of downsizing and
reengineering promote relatively stable and even
declining in labor cost. But Information
Technology cost increased.
Outsourcing can be a very useful strategy, but
can also be a high risk effort/try.
A SURVIVAL GUIDE FOR MANAGERS
INVOLVED IN OUTSOURCING

5 groups of key participants who make or break
an outsourced information system initiative :
- Client managers who must make major outsourcing
decisions
- Client IT and IS professionals who provide specialized
counsel and critical inputs to design and operations.
Also technical linkages between clients & outsourcers.
A SURVIVAL GUIDE FOR MANAGERS
INVOLVED IN OUTSOURCING
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The line managers who are the actual users of these
Information Systems.
Outsourcers professionals : systems designers and
analysts, programmers and project architects.
- Outsourcer project and program managers.
Software and Systems development issues :
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Managing IT is a problem for line executives
Trend on outsourcing increased
Business needs and technology are very
dynamics
Managements wants outsourcer to built and
operate the new systems
Managements defined outputs as : produced,
service on contribution.
Information Systems: not clearly define.
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Partnering between outsourcer and company in
development and operation of IS are difficult.
Many IS force business to adapt to the new
technology not the reverse.
Outsourcers provide huge assistance in developing
new computer based : management and decision
support systems and operating and maintenance.
But they can’t teach manager what their business
should be doing, what the technology should be
accomplishing.
Management should be making the choices.