If given the chance to be invited to attend a seminar-workshop on information systems planning with some of the faculty members. I would really think hard on what right decision should be made regarding this issue. Well it’s quite confusing because there’s no wrong if a company will in source or outsource. Both have their advantages and disadvantages. Let me first define in sourcing and outsourcing and compared them.
What is Outsourcing?Outsourcing is subcontracting a process, such as product design or manufacturing, to a third-party company. The decision to outsource is often made in the interest of lowering cost or making better use of time and energy costs, redirecting or conserving energy directed at the competencies of a particular business, or to make more efficient use of land, labor, capital, (information) technology and resources Outsourcing became part of the business lexicon during the 1980s. It is essentially a division of labor. Out sourcing in the information technology field has two meanings One is to commission the development of an application to another organization, usually a company that specializes in the development of this type of application. The other is to hire the services of another company to manage all or parts of the services that otherwise would be rendered by an IT unit of the organization. The latter concept might not include development of new applications.
What is In-sourcing?
The opposite of outsourcing can be defined as in-sourcing. When an organization delegates its work to another entity, which is internal yet not a part of the organization, it is termed as in-sourcing. The internal entity will usually have a specialized team who will be proficient in the providing the required services. Organizations sometimes opt for in-sourcing because it enables them to maintain a better control of what they outsource. In-sourcing has also come to be defined as transferring work from one organization to another organization which is located within the same country. In-sourcing can also mean an organization building a new business center or facility which would specialize in a particular service or product. In-sourcing can also mean an organization building a new business center or facility which would specialize in a particular service or product.
As of now, IT in-sourcing, or bringing previously outsourced IT functions back in-house, is on the rise, according to experts. There is a lot of factors that should be considered in order to decide well. One of those is the global economic recession, IT outsourcing scandals, and the potential cost savings of decreasing the number of outsourced contracts. Companies are even pulling back some outsourced functions because they have found they don’t offer the speed and control that in-sourcing does. Even though there are advantages outsourcing could do, such as less capital expenditure. For example, by outsourcing information technology requirements, a company does not have to buy expensive hardware and software. Less management headache. For example, by outsourcing business process such as accounting, a company no longer has to hire and manage accounting personnel, focus on core competencies. And lastly outsourcing non-core related processes will allow a business to focus more on its core competencies and strengths, giving it a competitive advantage, however, there are some advantages outsourcing has like these Less managerial control, it may be harder to manage the outsourcing service provider as compared to managing your own employees. Outsourcing company goes out of business. If your outsourcing service provide goes bankrupt or out of business, your company will have to quickly transition to a new service provider or take the process back in-house. May be more expensive. Sometimes it is cheaper to keep a process in-house as compared to outsourcing. And lastly would be security and confidentiality issues. If your company is outsourcing business processes such as payroll, confidential information such as salary will be known to the outsourcing service provider. But still we can never deny that disadvantages of off shoring have a lot of effects to a company. Especially on the issue about the security. It is the most important thing in an organization, having confidentiality in any of their files and information.
So if they would ask me about my stand, I would rather go with in-sourcing. The reason is to consider the information's confidentiality. Choosing personnel within a company can assure the company's operations and process kept secret because nowadays, it is very hard to find trustworthy personnel. Also, with regard to expertise, we know that there are lots of skilled IT professionals who are working in our University, so why we need to get people outside the institution and not working within the University wherein we already have people who can make or perform that particular job. Another that we should consider about our University is the financial status we are facing right now. We can never be sure if this time, our University could afford on outsourcing software packages for the information systems functions of the school. And it is better to check our resources and allocate solutions that would suit our financial capabilities.
As what have said awhile ago in-sourcing, aside from being cheaper, is more secured than outsourcing. Though outsourcing can provide better competition that makes it a little cheaper, it would not outweigh the advantages given by in-sourcing. It would be easier for our University since they would just hire and manage their own staff. Also through in-sourcing the University could have hands-on control through the development life cycle of their projects. Instead of relinquishing control to an outsourcing firm who does not understand the University’s project as they do, In-Source allows their knowledge and direction to more effectively impact the development process of the information systems functions of the school.
Since outsourcing deals with venturing from outside the company or even outside the Philippines, in-sourcing is much preferable because it eliminates vendor risk and vendor management costs. The University would never mind on dealing with long term contract with other company. It just simple contract between their own staff and would definitely reduced need for ongoing renegotiation. And it is nice to hear that the University would retain full control of the process and the quality of the output. True, in-sourcing assures the University’s information security and integrity and much more ensured. There will be less irregularities and faster data compilation can be done because the person who is gathering it works is within the University, thus he knows how the company functions and what is its exact needs than a person outside the University.
Let us say that the University asked me about the Enrollment System, if it is right to outsource than to in-source. For me the school had a bunch of skilled programmers who can actually do the job better that anyone outside. The reasons would the person who will design and maintain the system is just only within the University so he/she knows better ideas on what to do. He is definitely familiar with the flow like outside contacts could not, he can easily figure out solutions whenever there are problems arising and know the best thing to do. As I always say, the University can lessen the cost if they will hire person inside, this is very important especially in the case of the University right now where they just implemented the budget cost-cutting. Because as they said so, we had a lot of competent IT staff and faculty that could handle the development of the Information System in the University. So why not hire them and let them do the work. The person inside can always do better, they can get ideas outside, and they can develop what they have. Also when the University opt to chose in sourcing, the people they hire would easily observed what the University needs since they are part of the organization. Also, they can suggest new things for the best of the systems that they made. Therefore will have better control over its development and functions.
It is more for the University to make use of their own resources. Like I said, if there is any problem that the Information System would be facing or something went wrong, they could easily communicate and contact their programmers. It is better that way, giving them more time to analyze and solve the problem that outsourcing cannot address easily. Someday, we would be IT professionals soon. And with this, we all know that the main concern of a system would have a better security and integrity. It does not mean if we pay so much attention the security of an Information System means of taking for granted about its quality.
I always mentioned this, but again, the University has a lot of its resources especially when it comes to skilled faculty and staff. As one of the top University in Mindanao, the University offers towering standards of education when it comes to Information System thus giving an idea of why not use these key people for the best.
References:
http://www.wikipedia.orghttp://www.ictstandards.com
