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Specific selective outsourcing services in the information technology (IT) industry in South Africa

M.B.A. / In the current decade, "whole of IT" outsourcing appears to be losing ground, and other options are being considered and sought, such as selective outsourcing. Every product, service, or technology has a life cycle, and although the outsourcing industry is at its maturity level, at the same time it is also going through various growth stages and still evolving with best practices. Wholesale or comprehensive outsourcing clearly seems to be on the decline. Highlights of this analysis are as follows: The whole of IT" outsourcing can be seen as a contract service agreement in which an organisation hands over the majority of IT responsibilities to an external company. These contracts are long-term agreements designed to give higher control and transparency on costs, generally with a fixed price arrangement. In the selective outsourcing model, organisations may choose to outsource part of their IT. For example, the IT infrastructure could be broken down into separate agreements for the IT network, desktop, applications, and help desk. Depending upon the spread and competencies of internal resources, the organisation may choose to outsource one or all of the components. Outsourcing has become one of today’s most powerful, organization shaping management tools and also more so in South Africa. Chapter Two covers the fact that companies experience growth based on specialization, expertise and excellence. It is growth based on focusing on those areas that most directly contribute to a company’s success. Outsourcing has become the new frontier for the modern business. When a decision is made to outsource, the company needs to decide which of the activities or services currently done in-house can be defined as being non-core to the business. It is very important that the management of these non-core functions is not outsourced. “The decision to outsource the IT function is primarily based on the need to get rid of an operational problem. IT can become a very expensive cost centre with all the difficulties associated with managing a technology intensive infrastructure” says Rose (1999:24). Outsourcing provides the opportunity to redesign the IT function, and the potential to access highly specialized skills to extend capability. The purpose of this research is to address the following problem statement: What percentage of the budget in the South African IT market by sector is spent on the specific mentioned selective outsourcing services? The author looks at this problem statement and uses available literature to do an in depth study to reach an understanding of the researched subject. In Chapter three, an appropriate research approach that is inductive has been followed. The telephone interview was chosen for data collection as the most suitable and cost effective method. A questionnaire was designed with undisguised questions to ensure consistency and relevance of the responses. The question construction that followed took into consideration question content, question wording, response structure, and question sequence. Finally, pre-testing of the measurement tool was done to ensure validity and reliability, thereby ensuring that a foundation was laid for Chapter Four in which presentation and analysis of the results are given. Chapter four presents the analyses and interprets the results of the study as supplied by respondents through the questionnaire. The results are presented in tables showing percentage figures and numbers for individual response categories, totals and averages to present a clear picture. Finally there is the analysis and interpretation of each section as presented in the tables. The researcher applies the literature discussed in Chapter Two to support and justify the use of the questions asked, and the application thereof to the concepts of the outsourcing and the specified selective outsourcing services business in South Africa. The research was conducted to address the problem and subproblems discussed in Chapter One. In conclusion in response to these problems, the investigated selective IT services which are mentioned in detail in chapter one model has emerged as an attractive alternative to the single-vendor approach. Essentially, a selective approach involves choosing best-of-breed vendors to administer various business services or business functions, leading to either a total or limited solution. However, although selective outsourcing may indeed address some longstanding outsourcing challenges, it also presents some new management issues.
Date31 March 2009
CreatorsMapetla, Palesa
Source SetsSouth African National ETD Portal
Detected LanguageEnglish

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