Outsourcing: a key to controlling escalating IT costs?
by Paul F. Takac
International Journal of Technology Management (IJTM), Vol. 9, No. 2, 1994

Abstract: In their search for optimum performance and cost efficiency many organizations have been critically examining the seemingly ever-increasing cost of, and dependence on, technology. In the course of examining possible alternative, and potentially more cost-efficient, approaches to technology management the concept of outsourcing has been widely discussed and has attracted high levels of interest among both industry and governments. Organizations are primarily driven towards outsourcing by a desire for cost rationalization, particularly through the achievement of economies of scale and operational efficiencies. By making data processing, networking and voice communications the core of its business, the outsourcer can presumably undertake such activities more efficiently. These efficiencies are to be found in people, software tools, computers, network management centres, back-up and recovery facilities and management focus. Essentially, the outsourcer's assumption is that he can do a better job cheaper than the user. Is this, however, correct? The purpose of this paper is to examine critically the concept, implementation and management issues related to outsourcing information technology services.

Online publication date: Sat, 23-May-2009

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