Outsourcing Technology

Abstract

OVERVIEW:Properly implemented, technology outsourcing can provide a number of strategic benefits, including improved quality, focus, flexibility, and leverage. But for companies to reap these benefits, their strategic sourcing decisions must take into consideration a number of factors. These include the protection, development and exploitation of core activities, as well as the need to relate sourcing decisions to the organization's competitive business strategy. The complex issues and assumptions associated with a decision to outsource require that managers construct a framework for their examination. This framework allows assessment of eight key components: compatibility of the partners' cultures, technology, expertise, objectives, people, costs, capabilities, and the contract itself.