If I were invited by the university of southeastern Philippines dean of the Institute of Computing to attend a seminar-workshop on information systems planning with some faculty members regarding the outsourcing of the university's information system.
Let us first define the following:
o Information system
o Outsourcing
o Insourcing
Information system is composed of hardware, software and people. These components can be found in different business operations. Information system is different from information technology because the former has a component that interacts with information technology components. Information technology components help the people handle things that are beyond the capability of a human person like handling large amounts of data.
Having your Information System or any business operations insourced or outsourced is one of the major critical decisions that your company has to undergo. Before you choose one, you have to know the benefits you get in opting for one of the two processes or choosing both. Also, you have to know how much you are going to spend in one or both the processes.
Outsourcing is when one company does information technology or information systems services to another company. Also, outsourcing is a contracted business process. It can be any costumer - related services or any other business - related operations.
Insourcing is a business process that has no contracts since the company is assigning a specific job to someone within their own company. One example is hiring someone within the company to develop a Human Resource Information System for the company. Reasons for insourcing could happen when the company had had enough with the products or services they had outsourced.
Insourcing VS Outsourcing
Insourcing as defined, is the non - contract process of assigning an employee within the company to do a specific job, in this way, information technology people will be able to maintain or keep their jobs. It can also earn the development staff more incentives in creating the insourced system. Insourcing is a business process or information system that will somehow take away your worries about competitions in the hardware and software products that are available in the market. Furthermore, insourcing will save you from abiding with what is in the market trend since you will be using your own resources and employees to do the job for you. Other than that, having your company to insource a business process, you will be able to maintain 100% of the confidentiality of your databases.
Outsourcing, on the other hand, is the contracted business process. This is where you pay for the services or tasks that the other outsourcing company will do for you. Usually, the companies who opt for outsourcing are those companies that do not have their own resources, capabilities and/or time to do a specific task for their respective organization. When you outsource your business process and other information technology or information systems services, you will be given up to date products available in the market. They usually pay the outsourcing company while at the same time abiding by the contract that both companies made. Database security, however, can be a question for the reason that if you are dealing with an outsource company, most specially when you are just renting your business process or information technology or information system service, the outsourcing company will have access to the records in your database or any confidential information regarding your corporation. Other than that, you might be having other services that you might not need in what you had purchased or outsourced from them.
Advantages and disadvantages of insourcing and outsourcing:
Chapter 7: Insourcing/Outsourcing by Bozart and Handfield:
“Insourcing gives a company a high degree of control over its operations, which is particularly desirable if the company owns proprietary designs or processes. Insourcing can also lower manufacturing costs, but only if a company enjoys the business volume necessary to achieve economies of scale.”
“Outsourcing typically increases a firm's flexibility and access to state-of-the-art products and processes. As markets or technologies change, many firms find changing supply chain partners easier than changing internal processes. In addition to increasing a firm's strategic flexibility and access to new technologies, outsourcing improves its cash flow. With outsourcing, less investment is required up front in the resources needed to provide a product or service. The benefits can be significant.”
“Control is also an issue in outsourcing. Buying firms may need to create costly safeguards to regulate the quality, availability, confidentiality, or performance of outsourced goods or services. At the extreme, they may lose key skills and technologies that are part of their core competencies. To counteract such threats, many companies oversee key design, operations, and supply chain activities and keep current on what customers want and how their products or services meet those demands9.”
Effects of Insourcing
As I was browsing the internet regarding the effects of insourcing process in the Philippines, I have read a paragraph on an article posted posted 3 Mar 2008 in Volume 10 Issue 9, titled THE COMPELLING CASE FOR INSOURCING in Managing Partner regarding the Philippines. It was written, “GSM work is done to a consistently high standard of quality. The Philippines has a large pool of highly educated, well trained and ambitious young professionals, fluent in English and highly motivated to
be part a large international firm. So it’s no surprise that the work output we see from GSM is world class in every sense.” GSM, by the way, stands for Global Services Manila. The entry on the article increased my sense of pride as a Filipino. It also showed the good side of insourcing in the Philippines that the Filipino’s are very competent in the business world. Going back to the effects of insourcing, insourcing a business process can help increase the number of jobs in the country. Moreover, you will be able to know more about the capabilities and enhance their skills of your employees. The downside of insourcing is that this can demote job growth most especially to the outsourcing companies.
Effects of Outsourcing:
The outsourcing in the Philippines has made the economy strong amidst the global financial crisis that the international community is suffering. There has been an increase in employment in the country especially in those places where business process outsourcing companies are located.
According to the article written by Mary Thomas in her article titled Effects of Outsourcing Jobs - The Positive and Negative, “The positive effects of outsourcing jobs are now being experienced by those who were bold and innovative enough to hire individuals from other countries for certain jobs.
“There are many positive effects of outsourcing, the most obvious of which is getting cheap labor and saving money in the process.
“One of the best ways to save money is to outsource some of the task required in your business to individuals from other countries such as Philippines, China and India. You will be surprised about the professionalism of the workers in these countries. More surprising is how you can have them work for you for a very affordable price.”
Now, in the case of the University of Southeastern Philippines, Institute of Computing, we all know that we have the best and the most competent faculty members and staff in the institute. They are equipped with different knowledge in computer programming and computer networking which is undoubtedly true. However, considering the number of faculty members, we really are short in manpower. If the university president will hire one or two faculty members to develop a system, there is always the possibility of having the number of active teaching staff decreased. Just like what happened before in the institute when the university decided to develop their own enrollment system, our professor resigned and we were turned over to another professor and it happened twice.
That is one of the reasons why I would opt for the outsourcing of the University of Southeastern Philippines’ Information System. Through outsourcing, the University of Southeastern Philippines will be able to save not only manpower and time but also, it will spare the Institute of Computing students from hampering the learnings on a particular subject. Other than that, the University of Southeastern Philippines and most specially, the Institute of Computing will be able to focus on the core functions and education of the students in the university.
It was written in the article titled Outsourcing vs. Insourcing: What's best for your Organization,
“If your organization has a number of non-core processes which are taking plenty of time, effort and resources to perform in-house, it would be wise to outsource these non-core functions. Outsourcing in this case, would help you save on time, effort, manpower and would also aid you in making quicker deliveries to your customers.
“If you require expertise services in areas which do not fall under your core competency, then outsourcing will be a good option as you can get access to expertise services. For reducing costs and making faster deliverables, outsourcing is again a good option.
“If your work involves production, then it would be more ideal for your organization to opt for insourcing, as you can save on transportation costs and exercise a better control over your project.
“It is not necessary to choose outsourcing over insourcing or vice versa. Your organization can outsource and insource at the same time. By outsourcing and insourcing simultaneously, you can have the best of what both offers and your business can get a competitive advantage!”
It is up to the company to decide whether they are going to opt for outsourced or insourced information system or any business operations because they are the ones who really know the capabilities and the needs of their organization.
References:
http://www.internetbasedmoms.com/internet-marketing/definition-of-outsourcing.html
http://www.mpmagazine.com/xq/asp/txtSearch.Information+Technology/exactphrase.1/sid.0/articleid.0EE11681-6505-4BF0-892C-B2A060BB54BE/qx/display.htm
http://answers.yahoo.com/question/index?qid=20080825111913AAVigRJ
http://ezinearticles.com/?Effects-of-Outsourcing-Jobs---The-Positive-and-Negative&id=2616295
http://www.outsource2india.com/why_india/articles/outsourcing-versus-insourcing.asp
Let us first define the following:
o Information system
o Outsourcing
o Insourcing
Information system is composed of hardware, software and people. These components can be found in different business operations. Information system is different from information technology because the former has a component that interacts with information technology components. Information technology components help the people handle things that are beyond the capability of a human person like handling large amounts of data.
Having your Information System or any business operations insourced or outsourced is one of the major critical decisions that your company has to undergo. Before you choose one, you have to know the benefits you get in opting for one of the two processes or choosing both. Also, you have to know how much you are going to spend in one or both the processes.
Outsourcing is when one company does information technology or information systems services to another company. Also, outsourcing is a contracted business process. It can be any costumer - related services or any other business - related operations.
Insourcing is a business process that has no contracts since the company is assigning a specific job to someone within their own company. One example is hiring someone within the company to develop a Human Resource Information System for the company. Reasons for insourcing could happen when the company had had enough with the products or services they had outsourced.
Insourcing VS Outsourcing
Insourcing as defined, is the non - contract process of assigning an employee within the company to do a specific job, in this way, information technology people will be able to maintain or keep their jobs. It can also earn the development staff more incentives in creating the insourced system. Insourcing is a business process or information system that will somehow take away your worries about competitions in the hardware and software products that are available in the market. Furthermore, insourcing will save you from abiding with what is in the market trend since you will be using your own resources and employees to do the job for you. Other than that, having your company to insource a business process, you will be able to maintain 100% of the confidentiality of your databases.
Outsourcing, on the other hand, is the contracted business process. This is where you pay for the services or tasks that the other outsourcing company will do for you. Usually, the companies who opt for outsourcing are those companies that do not have their own resources, capabilities and/or time to do a specific task for their respective organization. When you outsource your business process and other information technology or information systems services, you will be given up to date products available in the market. They usually pay the outsourcing company while at the same time abiding by the contract that both companies made. Database security, however, can be a question for the reason that if you are dealing with an outsource company, most specially when you are just renting your business process or information technology or information system service, the outsourcing company will have access to the records in your database or any confidential information regarding your corporation. Other than that, you might be having other services that you might not need in what you had purchased or outsourced from them.
Advantages and disadvantages of insourcing and outsourcing:
Chapter 7: Insourcing/Outsourcing by Bozart and Handfield:
“Insourcing gives a company a high degree of control over its operations, which is particularly desirable if the company owns proprietary designs or processes. Insourcing can also lower manufacturing costs, but only if a company enjoys the business volume necessary to achieve economies of scale.”
“Outsourcing typically increases a firm's flexibility and access to state-of-the-art products and processes. As markets or technologies change, many firms find changing supply chain partners easier than changing internal processes. In addition to increasing a firm's strategic flexibility and access to new technologies, outsourcing improves its cash flow. With outsourcing, less investment is required up front in the resources needed to provide a product or service. The benefits can be significant.”
“Control is also an issue in outsourcing. Buying firms may need to create costly safeguards to regulate the quality, availability, confidentiality, or performance of outsourced goods or services. At the extreme, they may lose key skills and technologies that are part of their core competencies. To counteract such threats, many companies oversee key design, operations, and supply chain activities and keep current on what customers want and how their products or services meet those demands9.”
Effects of Insourcing
As I was browsing the internet regarding the effects of insourcing process in the Philippines, I have read a paragraph on an article posted posted 3 Mar 2008 in Volume 10 Issue 9, titled THE COMPELLING CASE FOR INSOURCING in Managing Partner regarding the Philippines. It was written, “GSM work is done to a consistently high standard of quality. The Philippines has a large pool of highly educated, well trained and ambitious young professionals, fluent in English and highly motivated to
be part a large international firm. So it’s no surprise that the work output we see from GSM is world class in every sense.” GSM, by the way, stands for Global Services Manila. The entry on the article increased my sense of pride as a Filipino. It also showed the good side of insourcing in the Philippines that the Filipino’s are very competent in the business world. Going back to the effects of insourcing, insourcing a business process can help increase the number of jobs in the country. Moreover, you will be able to know more about the capabilities and enhance their skills of your employees. The downside of insourcing is that this can demote job growth most especially to the outsourcing companies.
Effects of Outsourcing:
The outsourcing in the Philippines has made the economy strong amidst the global financial crisis that the international community is suffering. There has been an increase in employment in the country especially in those places where business process outsourcing companies are located.
According to the article written by Mary Thomas in her article titled Effects of Outsourcing Jobs - The Positive and Negative, “The positive effects of outsourcing jobs are now being experienced by those who were bold and innovative enough to hire individuals from other countries for certain jobs.
“There are many positive effects of outsourcing, the most obvious of which is getting cheap labor and saving money in the process.
“One of the best ways to save money is to outsource some of the task required in your business to individuals from other countries such as Philippines, China and India. You will be surprised about the professionalism of the workers in these countries. More surprising is how you can have them work for you for a very affordable price.”
Now, in the case of the University of Southeastern Philippines, Institute of Computing, we all know that we have the best and the most competent faculty members and staff in the institute. They are equipped with different knowledge in computer programming and computer networking which is undoubtedly true. However, considering the number of faculty members, we really are short in manpower. If the university president will hire one or two faculty members to develop a system, there is always the possibility of having the number of active teaching staff decreased. Just like what happened before in the institute when the university decided to develop their own enrollment system, our professor resigned and we were turned over to another professor and it happened twice.
That is one of the reasons why I would opt for the outsourcing of the University of Southeastern Philippines’ Information System. Through outsourcing, the University of Southeastern Philippines will be able to save not only manpower and time but also, it will spare the Institute of Computing students from hampering the learnings on a particular subject. Other than that, the University of Southeastern Philippines and most specially, the Institute of Computing will be able to focus on the core functions and education of the students in the university.
It was written in the article titled Outsourcing vs. Insourcing: What's best for your Organization,
“If your organization has a number of non-core processes which are taking plenty of time, effort and resources to perform in-house, it would be wise to outsource these non-core functions. Outsourcing in this case, would help you save on time, effort, manpower and would also aid you in making quicker deliveries to your customers.
“If you require expertise services in areas which do not fall under your core competency, then outsourcing will be a good option as you can get access to expertise services. For reducing costs and making faster deliverables, outsourcing is again a good option.
“If your work involves production, then it would be more ideal for your organization to opt for insourcing, as you can save on transportation costs and exercise a better control over your project.
“It is not necessary to choose outsourcing over insourcing or vice versa. Your organization can outsource and insource at the same time. By outsourcing and insourcing simultaneously, you can have the best of what both offers and your business can get a competitive advantage!”
It is up to the company to decide whether they are going to opt for outsourced or insourced information system or any business operations because they are the ones who really know the capabilities and the needs of their organization.
References:
http://www.internetbasedmoms.com/internet-marketing/definition-of-outsourcing.html
http://www.mpmagazine.com/xq/asp/txtSearch.Information+Technology/exactphrase.1/sid.0/articleid.0EE11681-6505-4BF0-892C-B2A060BB54BE/qx/display.htm
http://answers.yahoo.com/question/index?qid=20080825111913AAVigRJ
http://ezinearticles.com/?Effects-of-Outsourcing-Jobs---The-Positive-and-Negative&id=2616295
http://www.outsource2india.com/why_india/articles/outsourcing-versus-insourcing.asp
Hire the best b2b sales and lead generation services
ReplyDeleteB2B Demand Generation Companies