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Information technology outsourcing

Thesis (MBA)--Stellenbosch University, 2003. / ENGLISH ABSTRACT: The study project examines the concept of information technology (IT) outsourcing to
external service providers. It is a relatively new concept in the South African scenario and
there are many risks associated with the process that can cause a company to loose large
amounts of money if outsourcing is not done right. The study project will aim to examine the
most important aspects regarding IT outsourcing in order to reduce the risks associated with
the process.
The definition of IT outsourcing is the practice of transferring an organisation's computer
centre operations, telecommunications networks, or applications development to external
vendors of these services. There are different variations of outsourcing applicable to IT, for
example: contracting out, outsourcing, in sourcing and co-sourcing. Companies have different
reasons for outsourcing and the risks associated with the process have to be taken into account
when embarking on an outsourcing initiative.
With IT outsourcing there are different services that can be outsourced, for example:
mainframe services, desktop computer services, security services and different application
services. The decision to outsource a specific area of IT is a strategic issue and the risks,
costs, and selection of the service provider are all very important factors to take into account.
One of the main factors that any company should take into account when embarking on a big
initiative is of course costs. The aim is the reduction of costs of the specific outsourced area.
Therefore the necessary measures need to be in place to measure costs before and after the
outsourcing process. It could happen that the outsourcing process do not provide the reduced
cost benefits envisaged initially. This could be due to hidden costs that were not taken into
account when the outsourcing initiative was planned.
Normally the outsourcing process is driven by a structured project and numerous important
factors need to be taken into account when managing the whole process. The factors include:
the vendor evaluation process, setup of the service level agreement, the request for proposal,
relationship with the supplier, communication of the whole process inside the company, the
contract between the two parties, and the transition period with the measuring of results
thereafter. The current IT skills shortage in South Africa is causing companies to rethink their IT
strategies and make use of external service providers to supply them with the necessary skills
to get the job done. The research illustrates this fact that IT consulting has one of the highest
adoption rates currently and with regard to the future. Full blown outsourcing is still a
relatively new concept in South Africa and companies will only adopt the concept as soon as
it has proved to be successful and cost effective.
As mentioned it is important that a structured methodology should be used to drive an
outsourcing process. It is important that the approach is structured around proven project
management principles with the correct measures in place to support and sustain the whole
process.
Outsourcing of IT services is a strategic decision that a company must take and the risks
associated with the process mean that it must be planned and executed very carefully.
Outsourcing has various risks associated with it like the appointment of the wrong service
provider. However, the outsourcing process can also have its merits and the most important of
these are most probably lower costs, new IT skills, and better service. The shortage of IT
skills in South Africa makes the idea of outsourcing more and more attractive because of the
fact that companies can now "buy" the skills without having to commit to long term
permanent employment contracts for permanent staff. / AFRIKAANSE OPSOMMING: Die navorsingsverslag handel oor die konsep van uitkontraktering van
inligtingstegnologie(IT) dienste aan eksterne diensverskaffers. Aangesien dit 'n relatiewe
nuwe tendens in Suid Afrika se IT bedryf is, en die risiko bestaan dat 'n maatskappy groot
geldelike verliese kan ly indien dit nie reg aangepak word nie, word daar gepoog om na die
belangrikste aspekte van uitkontraktering te kyk om die risikos daaraan verbonde so laag as
moontlik te hou.
Die definisie van IT uitkontraktering is die oordrag van 'n organisasie se rekenaar sentrum
operasies, telekommunikasie netwerk, of toepassing ontwikkeling na 'n eksterne verskaffer
van hierdie dienste. Daar is verskillende variasies van uitkontraktering van toepassing op IT
soos byvoorbeeld: uitkontraktering, inkontraktering, en gesamentlike kontraktering.
Maatskappye het verskillende redes om 'n diens uit te kontrakteer en die risikos verbonde aan
die proses moet sorgvuldig in gedagte gehou word wanneer die uitkontrakteringsproses
aangepak word.
Met IT uitkontraktering is daar verskillende dienste wat uitgekontrakteer kan word soos
byvoorbeeld: hoofraam dienste, persoonlike rekenaar dienste, sekuriteitsdienste en verskeie
rekenaar applikasie dienste. Die besluit om 'n spesifieke area van IT uit te kontrakteer is 'n
strategiese kwessie vir die maatskappy en die risikos, kostes en keuse van eksterne
diensverskaffer is almal baie belangrike faktore wat in gedagte gehou moet word.
Een van die vernaamste faktore wat enige maatskappy in ag behoort te neem wanneer 'n groot
inisiatief aangepak word, is natuurlik kostes. Die doel van uitkontraktering is om die kostes
van die spesifieke area te verlaag. Daarom moet die nodige maatreƫls in plek wees om die
kostes vooraf en na die uitkontrakteringsproses te meet. Die uitkontraktering inisiatief kan die
maatskappy egter baie duur te staan kom en glad nie die koste voordele bied wat aanvanklik
beplan is nie. Dit kan wees as gevolg van verskuilde kostes wat nie met die beplanning van
die proses in ag geneem is nie.
Gewoonlik word die uitkontrakteringsproses gedryf deur 'n gestruktureerde projek en
verskeie belangrike faktore moet in ag geneem word vir die hele proses. Die faktore sluit in:
die evaluasieproses om die regte diensverskaffer aan te stel, die opstel van die regte dokumentasie in terme van die diensvoorstel voorlegging, verhouding met die
diensverskaffer, die opstel van die diensvlak ooreenkoms, kommunikasie oor die hele proses
binne die maatskappy, die kontrak tussen die twee partye, oorgangstadium en die meting van
voordele daarna.
Die huidige tekort aan IT vaardighede in Suid Afrika veroorsaak dat maatskappye hul IT
strategie moet herdink en die opsie van eksterna diensverskaffers wat die nodige vaardighede
kan verskaf, oorweeg word. Die studie illustreer hierdie feit dat IT konsultasie een van die
hoogste vlakke van ingebruikneming tans en vir die toekoms het. Volledige IT funksie
uitkontraktering is nog 'n relatiewe nuwe konsep in Suid Afrika en maatskappye sal slegs die
idee aanneem sodra uitkontraktering as suksesvol en koste effektief bewys is.
Soos reeds genoem is dit belangrik dat 'n gestruktureerde metodologie gebruik word om 'n
uitkontrakteringsinisiatief te dryf. Dit is belangrik dat die aanslag geskoei is rondom bewese
projekbestuursbeginsels en dat die regte maatreƫls getref is om die proses te ondersteun.
Uitkontraktering van IT dienste is 'n strategiese besluit wat 'n maatskappy moet neem. Die
risikos daaraan verbonde veroorsaak dat die beplanning en aanpak van die proses baie deeglik
en noukeurig gedoen moet word. Uitkontraktering het verskeie risikos soos om die verkeerde
eksterne diensverskaffer te kies, maar kan ook voordelig vir die maatskappy wees en die
grootste voordele wat 'n maatskappy kan verwag is verlaagde kostes en nuwe IT vaardighede.
Die probleem van 'n tekort aan goed opgeleide IT personeel in Suid Afrika maak die idee van
uitkontraktering al meer aanlokliker omdat dit 'n goeie manier is om goeie vaardighede in te
"koop".

Identiferoai:union.ndltd.org:netd.ac.za/oai:union.ndltd.org:sun/oai:scholar.sun.ac.za:10019.1/53467
Date03 1900
CreatorsDe Jongh, Henk
ContributorsFourie, L. C. H., Stellenbosch University. Faculty of Economic & Management Sciences. Graduate School of Business.
PublisherStellenbosch : Stellenbosch University
Source SetsSouth African National ETD Portal
Languageen_ZA
Detected LanguageUnknown
TypeThesis
Format67 p.
RightsStellenbosch University

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