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OUTSOURCING
What is outsourcing?
Shifting activities that used to be done inside a firm to an outside company, which can do these
activities more cost-effectively. Big firms have outsourced a growing amount of their business since
the early 1990s, including increasingly off shoring work to cheaper employees at firms in countries
such as India. This has become politically controversial in countries that lose jobs as a result of off
shoring. However, a firm that outsources can improve its efficiency by focusing on those activities in
which it can create the most value. The firm to which it outsources can also increase efficiency by
specializing in that activity. That, at least, is the theory. In practice, managing the outsourcing process
can be tricky, particularly for more complex activities
What did Ford do?
SOUTHFIELD, Mich., Dec. 1 /PRNewswire-First Call/ -- Tech Team Global, Inc., ,
A worldwide provider of IT and business process outsourcing Business process outsourcing (BPO)
is the contracting of a specific business task, such as payroll, to a third-party service provider.
Usually, BPO is implemented as a cost-saving measure for tasks that a company requires but does
not depend upon to maintain its position in  support services, today announced a three-year contract
renewal with Ford Motor Company to provide single-point-of-contact (SPOC SPOC Single Point Of
Contact SPOC Sydney Paralympic Organising Committee SPOC Single Point Of Control SPOC
Search and Rescue Point of Contact SPOC Space Operations Center SPOC Saturn Performance
Owners Club SPOC State Police Officers Council ) support services for clients who utilize Ford
Motor Company's IT products and services. This contract encompasses help-desk support, desktop
support, and program management services for Ford Motor Company, Ford Financial, and Ford
Motor Company's Premier Auto Group. Additionally, the Ford supplier base receives help-desk
support on supplier-used applications. The SPOC program staff, which is managed by Ford, is
distributed throughout North America  third largest continent (1990 est. pop. 365,000,000),
c.9,400,000 sq mi (24,346,000 sq km), the northern of the two continents of the Western
Hemisphere.  and Europe and the Support Centers handle support-related requests from Ford Motor
Company locations around the globe.
The SPOC process enables Ford Motor Company end users and suppliers to rely on one, single point
of contact for the resolution of all IT support incidents, which are resolved, tracked, and analyzed
using common global best practices. SPOC deliverables include vendor accountability, a sharpened
focus on incident avoidance, increased customer satisfaction, and substantial cost savings for Ford
Motor Company and its entities.

Advantages and Disadvantages.

Advantages of outsourcing Disadvantages of outsourcing

1. Loss Of Managerial Control

1.Focus On Core Business
The Outsource company may not share the
The business can focus on doing their
same vision and mission statements that
 primary business, Ford can continue drive your company.
making cars
2. Hidden Costs
2. Cost And Efficiency Savings
The contract doesn’t cover all the cost that
The company doesn’t have to invest in can occur. This may lead to hidden cost.
software and maintenance or people to run
it.
3. Threat to Security and
3. Reduced Overhead
Confidentiality
IT department need office space, by Information is the difference between
outsourcing, the company doesn’t need to having a business and closing the
business. When information is send to a
hire office.
third party there is always a risk of losing
data.
4. Quality Problems
4, Operational Control
The outsource IT company must make a
By outsourcing IT the company get experts profit, to save money, second grade
in to help with operations, this can bring software or share-ware could be used that
influence the quality of service.
more control and better management
5. Staffing Flexibility 5. Tied to the Financial Well-Being of
Can bring additional resource to the Another Company
company when you need it, but the people The well being of the outsourcing
will go when the problem is resolved. company can have a influence on your
company and if the outsources company
go bankrupt you it can become your
problem.
5. Bad Publicity and Ill-Will
6. Continuity & Risk Management
The word outsourcing can bring memories
When there is employee turn-over, the
of people that have lost their work. This
company will have stability in the way
can lead to bad marketing.
their IT functions.

POLICY

1 Introduction
1.1.1 Outsourcing involves transferring responsibility for carrying out an activity (previously carried
on internally) to an outsourcer for an agreed charge. The outsourcer provides services to the
customer based on a mutually agreed service level, normally defined in a formal contract.
1.1.2 Advantages and Disadvantage of outsourcing

2 Objective
2.1.1 This policy will help to manage the risks of IT outsourcing.

3 Scope
3.1.1 The policy applies throughout <ORGANIZATION>.

3.1.2 Outsourcing providers (also known as outsourcers) include:

4 Policy axioms
4.1.1 The commercial benefits of outsourcing non-core business functions must be balanced against
the commercial and information security risks.

4.1.2 The risks associated with outsourcing must be managed through the imposition of suitable
controls, comprising a combination of legal, physical, logical, procedural and managerial
controls.

5 Policy statements

5.1 Choosing an outsourcer

5.1.1 Criteria for selecting an outsourcer shall be defined and documented, taking into account the:

5.1.2 The criteria may be defined as the result of the risk assessment.

5.2 Assessing outsourcing risks

5.2.1 Management shall nominate the risks before the function/process is outsourced, using
<ORGANIZATION>’s standard risk assessment processes.

5.2.2 The result of the risk assessment shall be presented to management for approval prior to
signing the outsourcing contract.

5.3 Contracts and confidentiality agreements

5.3.1 A formal contract between <ORGANIZATION> and the outsourcer.

5.4 Hiring and training of employees

5.4.1 Outsource employees, contractors and consultants working on behalf of <ORGANIZATION>

5.5 Access controls

5.5.1 In order to prevent unauthorized access to <ORGANIZATION>’s information assets by the

outsourcer or sub-contractors, suitable security controls need to be implemented.

5.5.2 If parts of <ORGANIZATION>’s IT infrastructure are to be hosted at a third party data centre.

5.6 Security audits

5.6.1 The audit shall also take into consideration the service levels agreed in the contract.

5.6.2 The frequency of audit shall be determined by management such as Internal Audit, Information
Security Management audit.

6 Responsibilities

6.1 Management

6.2 Outsourced business process owners

6.3 Information Security