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Home Notifications My Community BBA P-5A19-S3, Information Systems Management Unit VII Unit VII Introduction Greetings!! You are almost done with this course!! Keep up the good work. In Unit VI, we covered information security and how to secure systems and data. This week we take an in-depth look at information systems management and outsourcing.

While outsourcing may have a bad reputation when people think that jobs are being taken away from someone, it can offer many benefits to all organizations involved. Also, it does not necessarily take away jobs. In many instances, outsourcing simply restructures the organizations within an industry. When you think about outsourcing, remember that it does not always mean hiring workers outside the country. Outsourcing can occur between two organizations in the same city.

Professor Bulloch Unit VII Study Guide Click the link above to open the unit study guide, which contains this unit's lesson and reading assignment(s). This information is necessary in order to complete this course. Unit VII Discussion Board Weight: 2% of course grade Grading Rubric Comment Due: Saturday, 05/11/:59 PM (CST) Response Due: Tuesday, 05/14/:59 PM (CST)     Go to Unit VII Discussion Board » Unit VII Case Study Weight: 11% of course grade Grading Rubric Due: Tuesday, 05/14/:59 PM (CST) Instructions Define what is meant by outsourcing. Explain how Peter Drucker’s statement (covered in the textbook in uCertify) about how one company’s back room is another company’s front room pertains to outsourcing.

Use an example. Summarize the management advantages, cost reduction, and risk reduction of outsourcing. Summarize the outsourcing risks concerning control, long-term costs, and exit strategy. Discuss which company you would outsource to and why. Does distance matter?    As a manager of an organization, you will often need to find ways to cut costs.

One way to cut costs is to outsource by hiring another organization to perform the service. Consider the scenario below. As a manager for the public outreach department, you realize that the current system for managing outreach issues is outdated. You would like to have a new outreach system developed using the Cloudera platform to help manage big data. However, no one in the organization has the expertise.

You will have to outsource the project to save on costs and avoid management problems. Two companies have sent in a bid—one from Vancouver, Canada, and one from Mumbai, India. The bid from India was slightly lower than the bid from Canada. Compose a response that includes the elements listed below. Your case study must be at least two pages in length (not counting the title and reference pages), and you must use at least two references as a source for your essay.

See the Suggested Reading section for some sample articles on outsourcing. Be sure to cite all sources used in APA format, and format your essay in APA style. Submit Unit VII Case Study » › Logout Mary Katz 5/8/19, 10)53 AM BBA 3551, Information Systems Management Course Learning Outcomes for Unit VII Upon completion of this unit, students should be able to: 6. Assess the key issues involved in managing the components of IT infrastructure. 6.1 Explore the concept of outsourcing, including the advantages and risks it presents.

6.2 Apply the concept of outsourcing to a given scenario. Course/Unit Learning Outcomes Learning Activity 6.1 Unit Lesson Chapter 11 Unit VII Case Study 6.2 Unit Lesson Chapter 11 Unit VII Case Study Reading Assignment Chapter 11: Information Systems Management Unit Lesson Managing Information Systems The information systems (IS) function of an organization is critical for organizational success. Because of this, it is important to manage this asset responsibly. There are five major functions to managing an IS department, and they are even more critical for young startup IS departments. You can learn about these functions in your textbook in uCertify.

The readings for this unit discuss these major functions in detail, so in this lesson, we will expand upon this to take a closer look at effective leadership in IS. There are many challenges facing managers and organizational leaders today such as meeting organizational goals and strategies, coping with changes in business relationships and technology, encouraging innovation, managing organizational knowledge, managing an organizational environment that is embracing mobility, and handling a workforce that is becoming more virtual. Managing such a challenging and diverse environment requires strong leadership, but, unfortunately, many organizational leaders and managers are not well equipped for the job (Kroenke & Boyle, 2017).

In the past, organizations used the top-down, or hierarchical, approach to manage IS in the organization. The top-down approach is when upper management makes the strategic decisions, and employees are expected to follow along, restricted in their ability to be creative or show initiative. This traditional style of leadership in IS can be problematic in that upper management may not have the experience or knowledge in IS to make those types of decisions. Organizational leadership must understand the nuances of IS and recognize that they cannot force IS to conform to the methods of the rest of the organization (Kroenke & Boyle, 2017). UNIT VII STUDY GUIDE Information Systems Management BBA 3551, Information Systems Management 2 UNIT x STUDY GUIDE Title By using the bottom-up approach, IS managers and staff can act in a leadership capacity and interact with upper management regarding IS decisions (Figure 1).

This is especially true when there are new innovations to technology. IS professionals will recognize the value of these innovations and better understand how this new technology could affect the organization’s future, especially its competitive strategy. Outsourcing Outsourcing occurs when you hire another company or organization to perform a service. The textbook uses a good example of how outsourcing can be used to help an organization perform a service. In this example, Google, known as an organization that provides search and mobile application services, did not have the resources to provide cafeteria services to its employees.

In order to provide this service to its employees, the company hired an outside vendor that specialized in food services to manage and maintain the employee cafeteria at Google. This way, Google can use its resources for its main function, providing search and mobile services (Kroenke & Boyle, 2017). The same concept applies to many organizations that do not specialize in IS. Instead of obtaining and maintaining IS resources, organizations can outsource IS activities so that they can concentrate on their essential function or front-room activities. Outsourcing provides several advantages such as obtaining expertise in an area in which the company lacks.

In the Augmented Reality Exercise System (ARES) scenario discussed at the beginning of Chapter 11 in the textbook, management understood that they needed to build an application for this system but recognized that they did not have the staff or the expertise to do this. To solve the staff and management problem, they outsourced this activity (Kroenke & Boyle, 2017). Outsourcing can also help reduce costs. In the Google example from the textbook, by outsourcing the cafeteria activities to another company, Google will not have to deal with the costs of training new cafeteria employees or deal with the day-to-day costs of maintaining the cafeteria. All of these costs would generally be covered under a fixed-price cafeteria contract (Kroenke & Boyle, 2017).

There are types of outsourcing, such as nearshore, offshore, and onshore (work-at-home), which can provide solutions for organizations that do not have the resources to perform certain activities outside the realm of their corporate function. Each of these will be discussed in the following paragraphs. Nearshore Outsourcing Nearshore outsourcing occurs when a company outsources to a nearby country such as from the United States to Canada, Mexico, or Puerto Rico (Figure 2). Figure 1: Daily Sprint meeting with management (Klean Denmark, 2011) BBA 3551, Information Systems Management 3 UNIT x STUDY GUIDE Title Nearshore outsourcing has several advantages. Because the source of the work is being provided relatively close to the company requesting the service, there may be fewer time zone issues and fewer cultural and/or language difficulties.

Also, the geographical proximity makes communication and traveling between the two countries easier (Gerbl, McIvor, Loane, & Humphreys, 2016). This would be especially advantageous for companies outsourcing complex information technology (IT) projects that may require frequent and ongoing communication between the two entities. In addition, in many cases, workers in nearshore organizations will be more highly trained than those in countries much further away such as in India and China, two of the top IT outsourcing destinations for many U.S. organizations (Oshri, Kotlarsky, & Willcocks, 2015). Nearshore outsourcing also provides organizations with cost-saving benefits because work is sent to another location where workers will generally be paid lower wages.

Another benefit is that, because of close proximity to the United States, foreign workers will be awake and working during the contracting organization’s hours of business should communication need to occur (Gerbl et al., 2016). On the other hand, it may not always be a good idea to use nearshore outsourcing. In some cases, it may be more expensive because the costs of using foreign workers may not be significantly lower. Another thing to consider is time costs. Will the nearshore organization be able to operate independently, or will the contracting company have to provide guidance and resources?

Another cost to consider is traveling costs. Will traveling between the two countries be necessary, and if so, how often (Gerbl et al., 2016)? Nearshore outsourcing may not be feasible when the IT project is complex or if the tasks involved require management oversight or direction from the contracting company (Gerbl et al., 2016). Nearshore outsourcing would be ideal for simple, day-to-day IT tasks such as customer service (help desk), development, analytics, maintenance, and production. Figure 2: Nearshore outsourcing example BBA 3551, Information Systems Management 4 UNIT x STUDY GUIDE Title Offshore Outsourcing Offshore outsourcing is when an organization contracts another company to perform operations in a foreign country (Figure 3).

For example, a company might outsource to Europe, Japan, South America, and Asia. Outsourcing to foreign countries can have some disadvantages. One disadvantage is cultural and/or language differences. Other disadvantages are time zone issues and the geographical distance, which could make communication and traveling between the two countries difficult, time- consuming, and expensive (Gerbl et al., 2016). However, in many cases, workers at offshore organizations may be highly trained and generally paid lower wages, which can help reduce costs for the contracting organization.

As in nearshore outsourcing, the organization must consider whether or not the offshore company can operate independently or if it will need constant guidance and resources. If traveling may be required, consider the costs involved with that. If the offshore company cannot operate independently or if excessive traveling may be required, it might be better to use onshore outsourcing if the bottom line is to save money (Gerbl et al., 2016). Similar to nearshore outsourcing, offshore outsourcing would not be ideal for complex IT projects that may require frequent and ongoing communication. Again, much like nearshore outsourcing, it might be best to use offshore outsourcing for simple, day-to-day operations such as help desk, development, analytics, maintenance, and production (Gerbl et al., 2016).

Onshore Outsourcing Onshore outsourcing is when operations are sent to another company located within the organization’s home country (Figure 4). In the Google example, Google outsourced their cafeteria operations to another company within the same locality. Several advantages to onshore outsourcing are that there will not be any cultural/language barriers, and communication can take place during the time that the contracting company is open for business. Traveling, if needed, can be managed efficiently to improve the bottom line (Gerbl et al., 2016). However, onshore outsourcing has some disadvantages; the main disadvantage is a decrease in cost savings.

In most cases, onshore outsourcing will not provide cost savings because the direct labor costs can be high (Gerbl et al., 2016). Although, in the case of Google, as discussed above, by not having to expend resources into managing and maintaining a cafeteria, Google can use those resources for its own operations. Figure 3: Offshore outsourcing example BBA 3551, Information Systems Management 5 UNIT x STUDY GUIDE Title Summary IT assets are critical components of organizations and need to be managed efficiently. Organizational structure is also important. Depending on the size and type of the organization, the organizational structure will determine the relationships between employees and managers.

This relationship is important for how business leaders develop processes and systems that align with the organization’s goals and strategies. One of the main reasons companies consider outsourcing is to save costs, gain expertise, and help free up time for managers. Offshore labor costs can be considerably less than wages for onshore and nearshore locations. Outsourcing can also provide expertise for the company that lacks this resource, especially in the development of innovate products. Outsourcing also helps management focus on the company’s main operations instead of on functions in which they do not have the expertise.

Some of the disadvantages of outsourcing to foreign countries is time and cultural and language barriers. If travel is required, this may be expensive and difficult to manage efficiently. Another concern is that even though costs can be considerably less, there is no guarantee that the products or services will be of high quality. References Gerbl, M., McIvor, R., & Humphreys, P. (2016). Making the business process outsourcing decision: Why distance matters.

International Journal of Operations & Production Management, 36(9), 1037–1064. Retrieved from com.libraryresources.columbiasouthern.edu/docview/?accountid=33337 Klean Denmark. (2011). Daily Sprint meeting [Image]. Retrieved from Kroenke, D. M., & Boyle, R.

J. (2017). Using MIS (10th ed.). New York, NY: Pearson. Oshri, I., Kotlarsky, J., & Willcocks, L. P. (2015).

The handbook of global outsourcing and offshoring (3rd ed.). New York, NY: Palmgrave Macmillan. Suggested Reading In order to access the following resources, click the links below. The following articles all explore the topic of outsourcing and are excellent materials that will help you complete your assignment for this unit. You are encouraged to review them.

Gerbl, M., McIvor, R., & Humphreys, P. (2016). Making the business process outsourcing decision: Why distance matters. International Journal of Operations & Production Management, 36(9), 1037–1064. Retrieved from com.libraryresources.columbiasouthern.edu/docview/?accountid=33337 Overby, S. (2017, February 17). Robotic process automation makes nearshore outsourcing more attractive.

CIO. Retrieved from com.libraryresources.columbiasouthern.edu/docview/?accountid=33337 Figure 4: Onshore outsourcing example BBA 3551, Information Systems Management 6 UNIT x STUDY GUIDE Title Persson, J. S., & Schlichter, B. R. (2015). Managing risk areas in software developm offshoring: A CMMI level 5 case.

JITTA: Journal of Information Technology Theory and Application, 16(1), 5–23. Retrieved from com.libraryresources.columbiasouthern.edu/docview/?accountid=33337 Ryan, P. (2009). Outsourcing: A historical cost-saving mainstay. CRM Magazine, 13(2), 34. Retrieved from t=true&db=a9h&AN=&site=ehost-live&scope=site Learning Activities (Nongraded) Nongraded Learning Activities are provided to aid students in their course of study.

You do not have to submit them. If you have questions, contact your instructor for further guidance and information. To test your knowledge of the material covered in this unit, complete the activities listed below. ï‚· Chapter 11 Active Review ï‚· Chapter 11 Using Your Knowledge ï‚· Chapter 11 Collaboration Exercise ï‚· Chapter 11 Review Questions ï‚· Chapter 11 Cards The activities are located within the chapter readings in uCertify. The Chapter 11 Active Review, Using Your Knowledge, Collaboration Exercise, and Review Questions are located at the end of the chapter. The cards can be accessed by clicking on the Cards icon within uCertify, which is located to the right of the chapter title, and the icon in uCertify resembles the image shown below.

Paper for above instructions

Outsourcing in Information Systems Management: Advantages, Risks, and Strategic Decisions

Introduction
Outsourcing, the practice of hiring external organizations or companies to perform specific services, has become a prevalent strategy among businesses aiming to optimize their operations, reduce costs, and focus on core activities (Kroenke & Boyle, 2017). Peter Drucker's statement that "one company's back room is another company's front room" highlights the interconnectedness of businesses and emphasizes that what is non-core for one firm can be a key service offering for another (Oshri, Kotlarsky, & Willcocks, 2015). This observation becomes particularly relevant when analyzing the outsourcing decisions concerning newly developing and deploying information systems, such as when a public outreach department seeks to update its management systems.
Defining Outsourcing
Outsourcing involves contracting out certain business processes or services to another company, which can either be within the same country (onshore) or abroad (offshore) (Kroenke & Boyle, 2017). Depending on the organization’s specific needs and capabilities, the outsourcing decision may involve various options, including nearshore, offshore, and onshore outsourcing. By this definition, organizations are able to delegate tasks or projects to specialized external firms that possess the requisite skills and infrastructure to perform them efficiently.
Drucker's Insight on Outsourcing
Peter Drucker’s assertion about the interdependence of businesses illustrates that outsourcing can effectively function as a catalyst for organizational efficiency (Overby, 2017). For instance, consider a technology firm that is not adept in customer support operations. By outsourcing this function to an established customer service firm, the tech company can concentrate on its technological core competencies while the outsourced firm leverages its expertise in customer service, thereby ensuring that both companies thrive.
Management Advantages of Outsourcing
Outsourcing presents multiple management advantages, including access to specialized expertise, enhanced flexibility, and reduced operational complexities. Many companies lack the internal resources or skills to manage specific functions effectively. By outsourcing operations, firms can leverage specialized capabilities (Kroenke & Boyle, 2017). Additionally, outsourcing allows businesses to remain agile in adapting to market changes without maintaining a large in-house workforce (Gerbl, McIvor, & Humphreys, 2016).
Furthermore, this flexibility may be paramount during uncertain economic climates, where hiring or laying off staff can prove to be a lengthy and politically charged process. Outsourcing offers more rapid adjustments, allowing management to scale operations up or down without the associated complexities of internal human resources adjustments (Ryan, 2009).
Cost Reduction and Risk Mitigation
One significant motivation for outsourcing is cost reduction. By contracting services to external firms with lower operational costs, businesses can allocate resources more efficiently. For example, outsourcing development tasks to a firm in Mumbai, India may yield significant savings compared to domestic contracts, allowing organizations to invest capital into other critical areas of growth (Kroenke & Boyle, 2017). In addition to cost savings, outsourcing can help spread risks. For instance, employing different service providers for various operations reduces dependency on a single source and insulates the firm against potential service interruptions caused by issues like local economic fluctuations or market volatility.
Outsourcing Risks: Control, Long-Term Costs, and Exit Strategies
Despite the notable advantages of outsourcing, significant risks must be considered. First, control over the outsourced processes can diminish, potentially impacting service quality. Misalignments between the contracting company and the service provider can lead to failures in meeting expectations (Gerbl et al., 2016). In addition, while initial costs may appear reduced, organizations must assess the long-term financial implications of outsourcing arrangements, including the potential for price increases from the service providers over time (Kroenke & Boyle, 2017).
Another critical concern is the exit strategy. Businesses need to deliberate over how they would disengage from an outsourcing contract, especially if the relationship does not yield the desired results. Severing ties with an outsourced vendor can be complicated and costly (Ryan, 2009). Companies must develop explicit exit strategies, ensuring they retain the capability to transition back in-house when necessary.
How Distance Affects Outsourcing Decisions
Distance plays a considerable role in outsourcing decisions. Proximity may ease communication, minimize cultural translation issues, and enhance collaboration. For example, nearshore outsourcing—contracting services to nearby countries—typically results in fewer time zones issues and less language barrier compared to offshore arrangements. Engaging a provider from Vancouver, Canada might foster smoother interactions than outsourcing to Mumbai, given the geographic and time zone differences (Gerbl et al., 2016).
Choosing an Outsourcing Partner: A Case Scenario
Given a scenario in which a public outreach department must choose between two bidders—one from Vancouver and another from Mumbai—several factors must be considered. While the bid from Mumbai is cheaper, the proximity of the Canadian bidder may result in faster onboarding and easier communication, critical for ensuring that the project effectively meets the organization’s requirements.
In this context, the choice to prioritize quality and effective collaboration over initial cost savings may lead to better outcomes in the long run. The potential for easier adjustments, real-time communication, and quick troubleshooting enhances the value proposition of selecting the Canadian provider (Oshri et al., 2015).
Conclusion
Outsourcing in information systems management is a strategic decision that can yield significant operational advantages when managed carefully. The statement by Peter Drucker about the interchangeable roles of different company functions reminds us of the collaborative nature of today’s business environment. While outsourcing presents numerous benefits, including expertise, flexibility, and cost reductions, it is critical to address the inherent risks around control and the long-term impacts of outsourcing decisions. In evaluating potential partners, organizations must consider the implications of distance and communication, ensuring that the chosen strategy aligns with their long-term goals.
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References
Gerbl, M., McIvor, R., & Humphreys, P. (2016). Making the business process outsourcing decision: Why distance matters. International Journal of Operations & Production Management, 36(9), 1037–1064.
Kroenke, D. M., & Boyle, R. J. (2017). Using MIS (10th ed.). New York, NY: Pearson.
Oshri, I., Kotlarsky, J., & Willcocks, L. P. (2015). The handbook of global outsourcing and offshoring (3rd ed.). New York, NY: Palgrave Macmillan.
Overby, S. (2017, February 17). Robotic process automation makes nearshore outsourcing more attractive. CIO.
Ryan, P. (2009). Outsourcing: A historical cost-saving mainstay. CRM Magazine, 13(2), 34.
(Note: five additional references may be included to meet the requirement of ten credible sources, including various academic journals and industry reports relevant to outsourcing, information systems management, and organizational strategies.)