Explain how it is possible for an outsource vendor to achieve economies of scale that are not possible for the

“Suppose you figure all this out and decide to get out of it. Now what? How do you undo an outsource agreement? All the critical knowledge is in the minds of the outsource vendor’s employees, who have no incentive to workforyotr- In fact their employment contract probably prohibits it. So nowyou have to take an existing operation within your owrr

Source; AlexRoz/S h utterstodk

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company, hire employees to staff that function, and relearn

everything you ought to have learned in the first place.

“Gimme a break. Outsourcing is fool’s gold, an expen-

sive leap away from responsibility. It’s like saying, ‘We can’t

figure out how’to manage an important function in our company, so you do it!’You can’t get awayfrom IS problems

by hiring someone else to manage them for you. At least you

care aboutyour bottom linel’

DISGUEiSIclN EUESTIc,NS

l. Hiring an organization’s existing IS staff is common practice when starting a new outsourcing arrangement. \trhat are the advantages ofthis practice to the outsource vendor? \Alhat are the advantages to the organization?

Suppose you work for an outsource vendor. How do you

respond to the charge that your managers care only about

how they appear to their employer (the outsource vendor),

not how they actually perform for the organization?

Consider the statement “We can’t figure out how to man-

age an important function in our company, so you do it!”

Do you agree with the sentiment of this statement? If this

is true, is it necessarily bad? Why or why not?

Explain how it is possible for an outsource vendor to achieve economies of scale that are not possible for the

hiring organization. Does this phenomenon justifz out- sourcing? \Ahy or why not?

In what ways is outsourcing IS infrastructule like out- sourcing the company cafeteria? In what ways is it dif- ferent? \Mhat general conclusions can you make about

infrastructure outsourcing? This guide assumes that the outsourcing agreement is for the organization’s computing infrastructure. Outsourcing for software development, as PRIDE is do-

ing, involves less direct involvement with the contractor. Explain howyour answers to questions 1-5 would be dif-

ferent for software outsourcing. How do your answers to questions 1-5 differ if ttie out- sourcing agreement is just for PaaS resources?

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