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36
BUDGETING

IT Outsourcing Can Be Profitable - or a Headache
 

Here's how to strike a mutually beneficial partnership.
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Insider Strategies for Outsourcing Information Systems
by Kathy M. Ripin and Leonard Sayles
Oxford University Press, 274 pages, $30

It's generally accepted today that firms should outsource components of their information systems. By letting outsiders do this work, costs can be cut, frustrations avoided, and results improved. But outsourcing has its problems. Ripin and Sayles address these problems in this book.

Basic Problems

A very basic problem is that management often equates outsourcing with giving up all responsibility for the information system. But it is important for executives to understand the new technologies. They must make critical decisions with the outsourcer regarding the design and operation of the information system and understand how changes in the system will affect the company's operation. Management must also understand that information systems aren't created, then used, like other products. They are "works in progress," never finished.

Aim of Book

The aim of this book is to show managers strategies they can use to work with outsourcers to create the best possible information system. It also offers guidance to the outsourcers faced with executives want to drop the entire job in the outsourcers' laps. Without cooperation from both sides and contributions from their areas of expertise, failure is inevitable.

Selecting the Outsourcer

The authors warn that selecting an outsourcer is far different from hiring other contractors. Instead of leading off with the usual request for information, they suggest that interested contractors meet with company representatives, listen while the proposal is explained, contribute their ideas, then mutually explore it. Both sides at this time must contribute, each on the other's turf. Only then should a contract be discussed.

The book continues through the challenging steps required to complete a project, warning of the many problems that may arise.

Throughout this process, the company must understand the progress being made. Progress reports won't provide this. What is needed is client involvement to the point where trouble will be seen developing and the causes will be recognized. This, the authors say, requires a sense of trust and mutual dependence between client and contractor.

Executives given the job of overseeing the growth of an information system will appreciate this book. So will outsourcers. It points out unexpected problems and offers solutions that have been tested. For both parties it promises an easier journey toward creation of the system and more satisfactory results.

Copyright 1999 Soundview Executive Book Summaries

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Last updated: May 1, 1999




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