IT system development

Outsourcing Proposal and Recommendation

for

Ingleburn Health Clinic

Overview
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The task and scope

Types of outsourcing
What type we recommend
Ingleburn readiness
Outsource process
Vendor selection
Typical costs
The risks
Quality aspects
Summary and our conclusion
References
Questions and answers
Keele University: IT&Mgt 2009/10
Group 1

The Task and Scope

Recommending the outsourcing approach that

Ingleburn needs to follow

Onshore and why?

Processes related to the selected onshore

outsourcing

Important concerns relating to these processes

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Types of Outsourcing
Onshore
- Onshore outsourcing is also called as domestic outsourcing, which
consists of both domestic vendors and domestic clients. Which
means that both (vendor and client) organizations are located in
same country.

Offshore
-the vender is overseas

Hirschheim,R., Heinzl, A., & Dibbern, J. (2006)

07/12/2014

Keele University: IT&Mgt 2009/10

Group 1

What Type We Recommend

We recommend onshore outsourcing
To avoid possible risks such as:
1. Offshore outsourcing hidden costs
2. Deficiency arising due to cultural differences
3. Communication / coordination complexity
4. Legal and data privacy issues with countries

07/12/2014

Keele University: IT&Mgt 2009/10

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Ingleburn Readiness
Things to do:
Clear understanding of the goals, objective
scope of outsourcing project.
Select a reputable vendor.
Vivid communication of requirements to
vendor.
Good open Communication.
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Keele University: IT&Mgt 2009/10

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Ingleburn Readiness

Contract negotiation and signing.

Proper top management support.
Good project management expertise.
Management of user expectations.
Adequate user involvement.

07/12/2014

Keele University: IT&Mgt 2009/10

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Outsource Process
Strategic Evaluation
Contractual Completeness
Relationship Management
Outsourcing Performance
07/12/2014

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Vendor Selection
Vendor selection problems
price, quality, prestige-service

General methods of vendor selection

Total cost approach, Total cost of ownership, Analytic
hierarchy process

For the case

medical knowledge

07/12/2014

Keele University: IT&Mgt 2009/10

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Typical Costs
The hidden costs

They are not negligible

Includes:
Finding the vendor
Drafting the contracts
Managing the efforts

Barthelemy, J. (2001)

Understand what goes into the cost and when to expect them
07/12/2014

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The Risks
Original set of requirements is
miscommunicated
Failure to manage end-user expectations
Lack of project management
Inadequate user involvement
Lack of top management support

07/12/2014

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Quality Aspects
Well documented Manuals & coding
standards.
Software reliability and correctness
Completeness
Efficiency
Usability

07/12/2014

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Summary and Our Conclusion

Go with onshore outsourcing to avoid
unnecessary risks
Prepare properly for outsourcing so as to:
Be prepared for the costs
Minimise risks and
Quality product with requirements met

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Keele University: IT&Mgt 2009/10

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13

References

Barthelemy, J. (2001), The hidden cost of IT outsourcing, MIT Sloan Management Review,
Vol. 42 No. 3, pp. 60-9.
Chou, D.C. & Chou, A.Y. (2009), "Information systems outsourcing life cycle and risks analysis",
Computer Standards & Interfaces, vol. 31, no. 5, pp. 1036-1043.
Hirschheim,R., Heinzl, A., & Dibbern, J. (2006) The Maturation of Offshore Sourcing of
Information Technology Work, Springer Berlin Heidelberg
Gonzalez, R, Jose Gasco and Juan Llopis (2006) Information systems offshore outsourcing A
descriptive analysis Department of Business Organisation, University of Alicante, Alicante, Spain
Kuipers, Joost Visser, Gerjon de Vries (2008), Monitoring the Quality of Outsourced Software
Tobias
Nakatsu, R.T. & Iacovou, C.L. (2009), "A comparative study of important risk factors involved in
offshore and domestic outsourcing of software development projects: A two-panel Delphi study",
Information & Management, vol. 46, no. 1, pp. 57-68.
Sean M. Handley a, W.C. Benton Jr.b, (2009) Unlocking the business outsourcing process model
Tafti H.A. (2005) Risks factors associated with offshore IT outsourcing Mohammed
Vijay Wadhwa, A. Ravi Ravindran (2007) ,Vendor selection in outsourcing. Computers &
Operations Research 34 3725 3737.
Willcocksa, L.P. , Lacityb, M.C. Kernc., T. (1999), Risk mitigation in IT outsourcing strategy
revisited: longitudinal case research at LISA

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Any Questions ?

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Thank you !

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