CIO Wisdom II: More Best Practices

Why?

Why should an organization outsource? IT outsourcing is generally done for cost savings, to achieve a better focus on the core business, or because the internal IT function is considered to be inefficient, ineffective, or incompetent (King 2001). From an economic standpoint, if an IT activity can be considered a commodity, then there is little justification for performing that activity internally. In these cases, a focused vendor should be able to provide the service at a higher level of quality, lower cost, or both (King 2001). In other words, outsourcing takes advantage of the economies of scale of another business that specializes in that domain.

One study proposed that firms choose to outsource as the costs and disadvantages of the traditional ...