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Trust and Partnership: Strategic IT Management for Turbulent Times by Robert J. Benson

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CHAPTER 6

The Effects of IT Sourcing*

IT services may be provided by the internal IT department or by external suppliers. Both options impact the relationship between business and IT. We start with discussing this choice as a strategic concern and how this impacts strategic, tactical and operational decision making with regard to IT. Next, the discussion continues with the effects of trust and turbulence. We conclude with a view on how internal versus external services delivery may evolve in the near future.

The IT Services Supplier as a Strategic Concern

A key strategic IT management concern is the question of who will supply the IT services that the business needs. This may be a corporate or business unit IT department, it may be one or more external IT service suppliers, and of course it may be a combination of both. This concern is not only typical for IT; other functions, such as human resources (HR), accounting, and logistics face the same questions. IT, particularly considering the developments in Internet-based communication both from person to system and from system to system, has been one of the drivers of this development. Availability of bandwidth and Internet technology makes it possible for HR services to be delivered from a central location (e.g., London) to staff located worldwide; these can even be customized to a high degree using so-called á la carte services. Another example is delivering accounting services from Bangalore to Western companies with a global ...

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