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Outsourcing Essay

Autor:   •  February 27, 2011  •  Essay  •  721 Words (3 Pages)  •  1,978 Views

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The decision between doing an in-house development and purchasing an available commercial product needs to be based on the financial and time and labor capacity of the company. An in-house development will be time-consuming and probably require a higher investment given the labor requires before, during, and after the implementation of the system. The advantage of doing an in-house development is that the final solution will be completely tailored to the requirements of the company. This is always a desirable condition when the functional requirements of the application are expected to change constantly. Looking for an available commercial solution has its own benefits like a lower cost and time-required implementation. The support for the application can be totally outsourced and therefore the protection of a service level agreement (SLA) can give peace of mind to the company and continuity to the business.

Some of the negative points about commercial packaged solutions are that their functional features are not always exactly what we need and the twist and tweaks can be difficult to apply. The cost of license renewal or version upgrades it's usually high and becomes forced by the creator of the software which every once in a while stops supporting its previous releases of the system. Some enterprise systems, like Oracle, allow customers to have both options. Oracle systems solutions provides a vanilla set of features as well as the ability to develop and attach additional modules and functions to the system making this type of decisions easier when the opportunity arises of having a hybrid solution. Some helpdesk systems work this way providing a base set of features that can be increased or improved by internal development.

When outsourcing any IT (Information Technology) functions a company needs to have an iron clad SLA. The right SLA can give the company piece of mind if it has "teeth". An example of a poor SLA, below is an excerpt from an article about American Eagle Outfitters (AEO). To make a long story short they outsourced with IBM and Oracle. During their peek selling period there sites were down for 4 days and 4 more days of hiccups. All because their backup


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