CHAPTER 15 - OUTSOURCING IN THE 21st CENTURY

• Insourcing - a common approach using the professional expertise within an organization develop and maintain the organization's information technology systems
• Outsourcing - an arrangement by which one organization provides a service or services for another organization that chooses not to perform them in-house.
• Onshore outsourcing - engaging another company within the same country for the services
• Nearshore outsourcing - contracting an outsourcing arrangement with a company in a nearby country
• Offshore outsourcing - using an organizations from developing countries to write code and develop systems
• Factors driving outsourcing growth :

1. Core competencies
2. Financial savings
3. Rapid growth
4. Industry changes
5. The internet
6. Globalization

• Outsourcing benefits include:

1. Increased quality and efficiency
2. Reduced operating expenses
3. Outsourcing non-core processes
4. Reduced exposure to risk
5. Economies of scale, expertise, and best practices
6. Access to advanced technologies
7. Increased flexibility

• Outsourcing challenges

1. Contract length
2. Competitive edge 
3. Confidentiality
4. Scope definition
5.