| Buyers or suppliers of IT outsourcing services are constantly tormented by the prospect of having to deal with the vicissitudes of risks in their projects. In today’s business environment, the precipitous rates of technological change have outpaced the ability of many organizations to support the IT function. These organizations are faced with the ‘usual’ challenge to maintain an IT function and to simultaneously manage in an environment of brisk change and perpetual uncertainty. All of this, however, in addition to the vagaries of risk and its effects, makes managing the IT function an exceptionally challenging task for many managers. As a result, these managers and the organizations they represent succumb by using outsourcing as an opportunity to de-focus from the IT function, something that is, commonly, also not an activity of core competence (Prahalad and Hamel, 1990). IT outsourcing promises to lower operating costs, lower risk exposure and take advantage of best practices that are introduced when working with the supplier of IT services. These organizations plan to transfer the IT function outside the organization and also to reap the payback of the IT function, through the use of outsourcing.
The term outsourcing conjures up several different meanings depending on how it is viewed. To potential and existing users of this concept, it may contain a connotation of a loss of control; and a fear that a third party would take over jobs, work and responsibility for what used to be an internal function. To others, it carries suggestions of a takeover; and to yet another group, outsourcing implies additional work that will be required to supervise additional personnel that are brought ‘on-board’. Many managers, it seems, attempt to seek consolation by rejecting the concept of outsourcing altogether. Further, ideas are devised and thoughts rationalized to address this feeling of trepidation through commonly heard reasons not to outsource. Common reasons that may inadvertently or unintentionally be used to reinforce these concerns include, for example, ‘IT outsourcing results in an unacceptable loss of control’, ‘intolerable increases in security issues [e.g. loss of corporate information]’ or just ‘undesirable increases in operational risk’. |