Sourcing is a mechanism by which a party outside the organization selects or procures IT resources.

 Systems are
developed here, or a third party or seller conducts the IT operation. Many versions of sourcing are known as
outsourcing (Turban et al., 2018). Onshore sourcing means that work or production can be obtained from
consulting firms or vendors in the same country. This is often referred to as domestic outsourcing, and services can
be accessed outside the business but in one country (What Is Onshore Outsourcing (Domestic Outsourcing)?, n.d.).
Onshore sourcing is the opposite of offshoring, including service delivery from individuals or businesses outside
the country. Onshore outsourcing aims to allow non-essential operations, such as standard human resources
functions, which still carry a business value but are not a part of a core business. In comparison to offshoring,
onshore outsourcing allows for a higher degree of control and better communication between them.

Since business strategy is increasingly connected to IT solutions, businesses increasingly worry about the
outsourcing risks (Turban et al., 2018). Shirking is when the provider intentionally under-performs when
demanding full payment, for example, charging for more hours than worked and/or first having outstanding workers
and then replacing them with less skilled ones. Poaching happens when the vendor develops a strategic application
for a client and then uses it for other clients. Opportunistic repricing occurs when a customer enters into a long-term
contract with a supplier. For unanticipated upgrades and contract extensions, the supplier changes financial
conditions at any stage or overcharges. If the vendor fails to meet the outsourcing arrangement's terms, there may
be a breach of contract by the vendor. Outsourcers sometimes represent themselves as more competent than they are
and cannot provide the products or services promised in the outsourcing agreement. It can be challenging to get out
of the outsourcing contract if the outsourcing relationship does not go well. Once the data is on the outsourcer
servers, the company does not influence how and when, and by whom the information can be accessed. As a result
of production and services being carried out by an outside source, IT employees may feel devalued.

Other alternatives are to lease or to purchase ITs as services. Cloud computing has expanded sourcing options
significantly (Turban et al., 2018). As legacy systems can no longer provide the requisite functionality to address
companies' problems, companies are moving to cloud computing. There are three main service models of cloud
computing – Infrastructure as a Service (IaaS), Platform as a Service (PaaS), and Software as a Service (SaaS)
("Types of Cloud Computing Services | Leading Edge," n.d.). There are clear distinctions between the three and
what an organization can provide in terms of storage and pooling resources. Still, they can all communicate with
each other to form a robust cloud computing model. IAAS is the most popular cloud computing service model,
providing a fundamental architecture of virtual servers, networks, operating systems, and data storage drives. It
allows flexibility, reliability, and scalability that many companies are searching for with the cloud and eliminates
office hardware. This makes it appropriate for small and medium-sized companies looking for a cost-effective IT
strategy to help business growth. IaaS is a wholly outsourced pay-for-use utility that is available as a public, private
or hybrid infrastructure. PAAS is where cloud providers implement the infrastructure and software platforms, but
companies can develop and operate their applications. Web applications can easily and quickly be generated via
PaaS, and the service is sufficiently scalable and robust to support it. PaaS solutions are flexible and suitable for
business environments where many developers work on a single project. It is useful in cases where an existing data
source needs to be leveraged. SAAS includes software deployment over the Internet to different companies that pay
via a subscription or pay-per-use model. It is a valuable tool for mobile sales management software that requires a
great deal of web or mobile access. SaaS is centrally controlled so that organizations do not have to think about their
maintenance and is suitable for short-term projects.

Cloud strategy's main challenges are migration to the cloud, focusing on cyber protection, privacy, data
availability, and service usability. (Turban et al., 2018). The newer problems apply to the cloud strategy, including
cloud integration with on-site infrastructure, extensibility, and cloud service efficiency. These cloud service
obstacles need to be discussed before they can be settled on sourcing solutions. One or more outsourcing
agreements are part of their IT strategy at most organizations today, including cloud computing, SaaS, and other "as
services" types.
References:

 Turban, E., Pollard, C., & Wood, G. (2018). Information Technology for Management: On-Demand
Strategies for Performance, Growth, and Sustainability (11th ed.). John Wiley & Sons, Inc.
 What is Onshore Outsourcing (Domestic Outsourcing)? (n.d.). SearchCIO. Retrieved December 3, 2020,
from https://searchcio.techtarget.com/definition/onshore-outsourcing
 Types of Cloud Computing Services | Leading Edge. (n.d.). LeadingEdge IT Services & Solutions.
Retrieved December 3, 2020, from https://www.leadingedgetech.co.uk/it-services/it-consultancy-
services/cloud-computing/what-are-the-types-of-cloud-computing/