IT outsourcing in the face of global and technology challenges

• Main Authors: Shittu, Abdul Jaleel Kehinde, Shittu, Nafisat Afolake Adedokun
• Other Authors: Pour, Mehdi Khosrow
• Format: Book Section
• Language: English
• Published: IGI Global 2015
• Subjects: T Technology (General)
• Online Access: http://repo.uum.edu.my/14008/1/IT-Out.pdf; http://repo.uum.edu.my/14008/; http://dx.doi.org/10.4018/978-1-4666-5888-2.ch080

Outsourcing is complex, time-consuming, and at times even a career-killer.There is no single approach to outsourcing that will guarantee success. Every situation is unique in one way or another (Pepple, 2011).This complexity seems responsible for numerous project failures recorded. Therefore, one must understand the seven deadly sins underlying most failed outsourcing efforts, of which is outsourcing activities that should not be outsourced (Barthélemy, 2003). Though ITO has experienced a rapid growth since early 1990s in developed countries, this growth did not come by without any challenge.The continous drive for greater efficiencies and cost reductions has forced several organisations to increasingly specialise in a limited number of key areas, thereby outsourcing the potential problematic and challenging areas.A critical analysis of these challenges redirects this research to Refocusing, Re-analysing, Re-engineering and Re-assessing (4Rs).The sluggish and nose-diving economic growth of some developed countries, which has cumulated into industrial layouts at an accelerating speed, has brought several transnational corporations (TNCs) to be increasingly “refocusing, re-analysing, re-assessing and probably re-engineer their operations (Shittu, et al., 2012, Jing & Jian, 2010). These 4Rs measures are equally applicable to public and private information technology outsourcing practises.Previous studies had shown that some developing countries such as India, China and Mexico are experiencing economic buoyancy due to effect of ITO (Jiang, 2009; Shittu & Adedokun-Shittu, 2011). Across organizations, ITO has been identified as one of the best practices for the management paradigm shift (Lin et al., 2011; Shittu et al., 2011; Ahlan & Shittu, 2006). It is one the matured business strategies used for more competence in the new organization system (Archstone, 2011).ITO can equally minimize the costs and increase efficiency and flexibility of organizational business operations. However, vendors need to focus on services level target but equally the cost, security, arrangement and of course quality of service (Anderson, 2011). This means that vendors need to view ITO from wider perspectives such as Business operation, and Logistics system. This holistic view of ITO can be achieved through a strategic outsourcing where companies outsource everything except those core activities in which they could achieve a unique competitive edge (Franceschini et al., 2003). Either the outsourcing activities are executed by the client ”Capacity Outsourcing” or the outsourcing activities are no longer pursued by the client ”Non-capacity Outsourcing” the ability of the organisation to correctly apply 4Rs would determine the outcome of outsourcing arrangements (Fill & Visser, 2000).