Chapter 10: Information Systems Sourcing

Question 1

what are the four (4) key questions when considering Information systems sourcing?

Answer 1

1. Make
2. Buy
3. How (What Products/Services)
4. Where (Where abroad?)

Question 2

When an organization decides to create to run its applications on its own computers or in the cloud as a result of one of the information systems sourcing questions.

Answer 2

Make

Question 3

When an organization decides to obtain its applications from an outside provider or providers as a result of one of the information sourcing systems questions.

Answer 3

Buy

Question 4

The following actions are for which information sourcing question?
Include the scope of the outsourcing and the steps that should be taken to ensure its success.

Answer 4

How

Question 5

The following decision is for which information sourcing question?
whether the client company should work with an outsourcing provider (i.e., vendor) in its own country, offshore, or in a cloud

Answer 5

Where

Question 6

What’s the last step once all sourcing decisions have been made?

Answer 6

Unhappy/Review

Question 7

What types of activities or products are typically considered when sourcing IS?

Answer 7

1. Applications
2. Systems
3. Help Desk Support
4. Telecommunications
5. Data Centers
6. Business Processes

Question 8

Make =

Answer 8

Insourcing

Question 9

Buy =

Answer 9

Outsource

Question 10

Providing IS services or developing them in the company’s own in‐house IS organization and/or in its local cloud.

Answer 10

Insourcing

Question 11

What are the five (5) most common reasons organizations decide to make/insource

Answer 11

1. To keep core competencies in‐house
2. So a firm can concentrate on its core competencies
3. Security
4. confidentiality
5. Resources

Question 12

What is the major risk of insourcing?

Answer 12

Requires management attention and resources

Question 13

An overseas subsidiary that is created to serve its main “client,” the parent company, but it may serve other clients as well.

Answer 13

Captive Center

Question 14

What are the three most common types of captive centers

Answer 14

1. Basic
2. Shared
3. Hybrid

Question 15

Type of captive center that provides services only to the parent firm

Answer 15

Basic

Question 16

Type of captive center that performs work for both a parent company and external customers.

Answer 16

Shared

Question 17

Type of captive center that performs the more expensive, higher‐profile, or mission‐critical work for the parent company and outsources the more commoditized work that is more cheaply provided by an offshore provider

Answer 17

Hybrid

Question 18

Purchasing a good or service that was previously provided internally or that could be provided internally but is now provided by outside providers.

Answer 18

Outsourcing

Question 19

What is the primary motivation for outsourcing?

Answer 19

Reducing Costs

Question 20

What are the three (3) primary factors that favor an a decision to outsource,.

Answer 20

1. Lower costs due to economies of scale
2. Ability to handle processing peaks
3. Need to consolidate data centers.

Question 21

Outsourcing providers derive savings from?

Answer 21

Economies of Scale

Question 22

How do outsourcing providers achieve economies of scale that the client company cannot? (3 Reasons)

Answer 22

1. Centralized data centers
2. Preferential contracts with providers
3. Large pools of technical expertise

Question 23

The outsourcing provider’s larger pool of resources allows them?

Answer 23

Leeway in assigning available capacity to its clients on demand

Question 24

Outsourcing may also offer an infusion of cash by?

Answer 24

Selling its equipment and/or buildings to the outsourcing vendor

Question 25

If an organization does not have employees with the training, experience, or skills in‐house to successfully implement new technologies, it should consider?

Answer 25

Outsourcing | outsourcing providers generally have larger pools of talent ## Footnote with more current knowledge of advancing technologies and best practices.

Question 26

Outsourcing providers also have an added advantage

Answer 26

because they can specialize in IS services. | providers' extensive experience in dealing with IS professionals ## Footnote helps them to understand how to hire, manage, and retain IS staff effectively.

Question 27

What are the seven (7) risks when outsourcing?

Answer 27

1. Clients must surrender control 2. Adequate anticipation of new technological capabilities when negotiating outsourcing contracts 3. Risks the potential loss of competitive advantage 4. High dependence on the outsourcing provider 5. Harder to protect competitive secrets 6. Provider's culture or operations may be incompatible 7. Savings may never be realized

Question 28

risk of over‐reliance for any number of reasons typically increases as

Answer 28

the size of the outsourcing contract increases.

Question 29

Increased volumes due to unspecified growth, software upgrades, or new technologies not anticipated in the contract may do what to the clients firm?

Answer 29

end up costing a firm considerably more than it anticipated when it signed the contract

Question 30

What are the three major decisions about how to outsource successfully?

Answer 30

1. Selection 2. Contracting 3. Scope

Question 31

This (how) outsourcing decision focuses on finding compatible outsourcing providers whose capabilities, managers, internal operations, technologies, and culture complement those of the client company.

Answer 31

Selection

Question 32

This (how) outsourcing decision focuses on securing formal outsourcing arrangements

Answer 32

Contracting

Question 33

Type of outsourcing agreement that defines the level of service to be provided, delivery time and expected performance of the service.

Answer 33

Service-Level Agreement

Question 34

This (How) outsourcing decision determines whether to pursue outsourcing fully or selectively with one (single sourcing) or more providers (multisourcing).

Answer 34

Scope

Question 35

When an enterprise outsources all its IS functions

Answer 35

Full Outsourcing

Question 36

When an enterprise outsources everything, how does it view IT

Answer 36

it does not view IT as a strategic advantage

Question 37

When an enterprise chooses which IT capabilities to retain in‐house and which to give to one or more outsiders

Answer 37

Selective Outsourcing

Question 38

This type of outsourcing reduces the client company's reliance on outsourcing with only one provider, provides greater flexibility and offers better service due to the competitive market.

Answer 38

Strategic (Selective) Outsourcing

Question 39

When a company decides to use multiple providers when fully or selectively outsourcing practices what?

Answer 39

IT Multisourcing

Question 40

Delegating IT projects and services in a managed way to multiple providers who must work cooperatively to achieve the client's business objectives.

Answer 40

IT Multisourcing

Question 41

What are the five (5) advantages of Multisourcing?

Answer 41

1. Limits the risks associated with working with just one provider. 2. Lowers IT service costs 3. improves quality through best‐of‐breed services, 4. Enhances flexibility 5. Provides easier access to specialized IT expertise and capabilities

Question 42

What are the three (3) disadvantages of Multisourcing?

Answer 42

1. Requires more coordination 2. Finger-Pointing 3. Unexpected competition among providers can hurt the client if not managed well

Question 43

Balancing provider cooperation and competition among the providers is called what?

Answer 43

Forced Coopetition

Question 44

What are the four (4) where outsourcing decisions?

Answer 44

1. Onshore 2. Offshore 3. Cloud 4. Crowd

Question 45

The dynamic provisioning of third‐party‐provided IT services over the Internet using the concept of shared services

Answer 45

Cloud Computing

Question 46

How can client companies realize cost savings through cloud computing?

Answer 46

by sharing the provider's resources with other clients

Question 47

What are the three (3) advantages of cloud computing?

Answer 47

1. Cheaper 2. No Upfront Costs 3. Flexible 4. Scalable

Question 48

What are the three (3) disadvantages of cloud computing?

Answer 48

1. overdependence 2. Loss of control 3. Security

Question 49

What are the five (5) cloud computing options?

Answer 49

1. Private Cloud 2. Community Cloud 3. Hybrid Cloud 4. Multi-Cloud 5. Public Cloud

Question 50

This type of cloud infrastructure is when data are managed by the organization and remain within its existing infrastructure, or it is managed offsite by a third party for the organization in the third party's private cloud

Answer 50

Private Cloud

Question 51

This cloud infrastructure is shared by several organizations and supports the shared concerns of a specific community

Answer 51

Community Cloud

Question 52

This cloud infrastructure combines two or more other clouds, with a combination of public and private clouds where the services are integrated with one another

Answer 52

Hybrid Cloud

Question 53

This cloud infrastructure icludes multiple clouds under centralized management with no distinction between private and public clouds, and none of the clouds need to work in combination

Answer 53

Multi-Cloud

Question 54

This cloud infrastructure is when data are stored outside of the corporate data centers in the cloud provider's environment.

Answer 54

Public Cloud

Question 55

What are the 3 major types of public clouds?

Answer 55

1. Software-as-a-service 2. Infrastructure-as-a-service 3. Platform-as-a-service

Question 56

Public Cloud type that provides infrastructure through grids or clusters or virtualized servers, networks, storage, and systems software designed to augment or replace the functions of an entire data center.

Answer 56

Infrastructure-as-a-service

Question 57

Public cloud type that provides software application functionality through a web browser.

Answer 57

Software-as-a-service

Question 58

Public Cloud type that provides services using virtualized servers on which clients can run existing applications or develop new ones without having to worry about maintaining the operating systems, server hardware, load balancing, or computing capacity

Answer 58

Platform-as-a-service

Question 59

A form of outsourcing that is provided by a very large number of individuals.

Answer 59

Crowdsourcing

Question 60

What are the two forms of crowdsourcing?

Answer 60

1. Collaboration 2. Tournament

Question 61

Type of crowdsourcing when individuals use social media to collectively create a common document or solution.

Answer 61

Collective Crowdsourcing

Question 62

Type of crowdsourcing that uses social media to solicit and collect independent solutions from a potentially large number of individuals but selects one or a few of the contributions in exchange for financial or nonfinancial compensation

Answer 62

Tournament Crowdsourcing

Question 63

Performing outsourcing work domestically (i.e., in the same country)

Answer 63

Onshoring/Inshoring | may be considered the “opposite” of offshoring.

Question 64

What are the two types of onshoring scope decisions?

Answer 64

1. Selective 2. Full

Question 65

Type of onshoring that hires outsourcing providers with operations in rural parts of the country.

Answer 65

Rural Sourcing

Question 66

Type of outsouring that occurs when the IS organization uses contractor services, or even its own hybrid captive center in a distant land

Answer 66

Offshoring

Question 67

What are the two (2) where abroad (offshoring) decisions?

Answer 67

1. Nearshoring 2. Farshoring

Question 68

A form of offshoring that involves sourcing service work to a foreign, lower‐wage country that is relatively far away in distance or time zone (or both).

Answer 68

Farshoring

Question 69

A form of offshoring that uses providers in foreign, lower‐wage countries that are relatively close in distance or time zones to the client company

Answer 69

Nearshoring

Question 70

To answer the where abroad question, client companies must consider what three (3) criteria?

Answer 70

1. Attractiveness 2. Level of development (Development Tiers) 3. Cultural differences

Question 71

What seven (7) criteria make a country more attractive for outsourcing?

Answer 71

1. Geographic orientation 2. English Proficiency 3. Political Risk 4. Regulatory Restrictions 5. Data Security 6. Legal Systems 7. Technical Infrastructure

Question 72

What model measures the level of proficiency of the development process within an IS organization?

Answer 72

Capability Maturity Model Integration (CMMI) | Level 1 is worst, level 5 is best

Question 73

How is the development tier determined

Answer 73

1. Industrial Maturity 2. Extent of Clustering 3. Export Revenues.

Question 74

Tiered countries tend to offer higher levels of skills but also charge higher prices.

Answer 74

Development Tier 1

Question 75

Tiered countries, the software industries are mostly “cottage industries” with small, isolated firms

Answer 75

Development Tier 2

Question 76

A business practice in which a company takes back in‐house assets, activities, and skills that are part of its information systems operations and were previously outsourced to one or more outside IS providers

Answer 76

Backsourcing | may involve partial or complete reversal of an outsourcing contract

Question 77

A long‐term, purposeful “arrangement by which companies set up a web of close relationships that form a veritable system geared to providing product or services in a coordinated way.

Answer 77

Strategic Network

Question 78

An economic community supported by a foundation of interacting organizations and individuals—the organisms of the business world.

Answer 78

Business Ecosystem