Outsourcing

Question 1

Outsourcing

- Advantages

Answer 1

• Certainty over cost
• Long-term contracts encourage planning for the future
• Economies of scale
• A specialist organisation is able to retain skills and knowledge
• New skills and knowledge become available
• Flexibility

Question 2

Outsourcing

- Disadvantages

Answer 2

• IS may be too important to be contracted out
• Risky commercial and/or legal terms where confidential information is available to outsiders
• Opportunities may be missed
• IP developed at companies expense can become available to competitors
• An organisation may be locked into an unsatisfactory contract
• FM does not encourage awareness of the potential costs and benefits of IS/IT