DQ 3 Backsourcing - contributed by employees spending time...

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According to the article, backsourcing is terminating outsourced information systems (IS) contracts and bringing them back in-house. In other words, it is a business practice that involves a company recalling its IS-related assets, procedures, and capabilities that were outsourced earlier to some provider(s). Some of the reasons for backsourcing include: costs exceeding expectations, gaps in technical and functional know-how, low service quality, and depleted control on outsourced services. When expectations of outsourced cost savings end up as overestimations, instead of materializing, companies look back at backsourcing as a way of cutting costs. It could also be that the demand for added outsourcing results in costs that exceed well beyond those compared to in-house processing. Increased costs could also be
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Unformatted text preview: contributed by employees spending time on outsourcing coordination, as it relates to activities of the provider. Situations where providers are unable to match the changing needs of the company and create the additional value that it seeks, could give rise to thoughts of backsourcing. When the level of service received falls below the expected level, and a drop in service quality follows, exiting the outsourcing relationship and looking at backsourcing becomes a viable option. Backsourcing is also an option in the scenario where a company ends up placing its core competencies or resources (that are critical to its success) in the hands of a provider, and eventually loses control over them....
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This note was uploaded on 11/04/2011 for the course BSA/310 BSA/310 taught by Professor Forman during the Spring '10 term at University of Phoenix.

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