� What are the critical success factors in taking the decision to outsource IT functions? Which functions,
if any, can/should be outsourced? What are the risks associated with outsourcing or offshoring?
� What are the advantages and disadvantages of short cycle time development? Do these mitigate the
decision to outsource?
� What cultural barriers exist when offshoring IT development? Can these barriers be overcome? If so,
Resources to be used for the paper
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When outsourcing IT functions, there are key success factors that should be taken into
consideration. The first factor is the cost of outsourcing as compared to that of an in-built
information system. However, the cost should not be the chief factor to consider as some
information systems might be very cheap but not very effective according to an organization’s
need. Another factor is the security of the organization’s information. Some information systems
need to be managed locally and confidentially; therefore, outsourcing may compromise the
security of the information. Specificity of assets is another factor that should be considered. One
should consider the ability of the outsourced information system to fit the specific organization’s
needs. Most outsourced systems are designed in such a way that they can be used by any
organization. Degree of uncertainty of the information systems is another critical factor. The IT
world is ever evolving, and when considering outsourcing, it is important to weigh between the
ability of the outsourced system to be overtaken by technology against an inbuilt system.
Frequency of transactions in this regard means how often the information system will be used.
For instance, outsourcing may be effective for transactions, which are done once for a long
period of time (Gottschalk & Solli-Sæther, 2005).
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According to Tafti (2005), insecurity of information is one of the risks associated with
outsourcing. The systems like payment processing system should never be outsourced at any
instance. Another risk factor is unsuitability of the information system in regard to the
organization’s objectives and needs. Each system has got its own specific users; outsourcing may
not meet the specific needs of the users who may employ the outsourced system. For example, in
a salary processing system, not all employees may be entitled to house allowance but most
information systems include this as one of the details in processing the salary.
Short cycle time gives an organization the ability to distinguish a mediocre team from
serious one. The short cycle time sets out a target to a team member on what is to be achieved
within a given period of time. This helps reduce the risk of delayed delivery of customers’
software due to issues of incompleteness of the process. Short cycle time development helps in
dealing with the factors of economic changes. When developing software for a long time it may
be affected by changes in the economy for example inflation which may result to higher prices of
hardware than the price that was planned for. The IT world of today undergoes changes now and
again, short cycle time development helps in development of software at the right time when it’s
relevant to the users before they are overtaken by other new inventions. The short cycle time
development is very appropriate in delivering emergencies, software’s that are needed within a
very short time. Its quick and this saves on time and cost through the consolidated efforts of team
members (Baskerville, & Pries-Heje, 2004).
One disadvantage of the short cycle time system development is that the system can be
developed within a very short time, not taking into consideration how it will serve for a long
time. Some systems are developed and work out correctly at their initial time of introduction, but
later on, it crashes down immediately after it is launched. Such problems occur because the
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system developers never take their time to fully analyze the system. Another disadvantage of the
short cycle time development is that the period for user education may not be enough to full
equip the users on how to use the new software before it’s launched. They may be trained but
they may not be very confident enough in handling the new software. This does not mitigate the
fact that a system can be in-built in order to meet the needs of the organization. Proper planning
can be done and by employing the appropriate expertise, the system can be developed effectively
(Baskerville, & Pries-Heje, 2004).
The bureaucratic nature of an organization can become a barrier in off-shoring IT
development. This involves the procedures that are encountered in signing off the deliveries at
the various stages in the system development lifecycle. Lack of management commitment can
influence the software development and implementation. If the management lacks commitment
then the whole project may fail due to issues such as financing of the project in a timely manner.
Technophobia is also another barrier towards software development within an organization. If
the users are technophobic then there may be a problem along the software development life
cycle when they shall be required to test and be educated on the software before it is launched.
It’s necessary that the management confirm and understand the necessity of the software before
its development begins. They should commit fully towards financing the project and sustaining
the project through continued maintenance.
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Baskerville, R., & Pries-Heje, J. (2004). Short cycle time systems development. Information
SystemsJournal, 14(3). Retrieved from Business Source Premier database.
Gottschalk, P., & Solli-Sæther, H. (2005). Critical success factors from IT outsourcing theories:
An empirical study. Industrial Management & Data Systems, 105(5/6). Retrieved from
Meso, P., & Smith, R. (2000). A resource-based view of organizational knowledge management
systems.Journal of Knowledge Management, 4(3). Retrieved from ABI/INFORM global
Tafti, M. H. A. (2005). Risks factors associated with offshore IT outsourcing. Industrial
Management & Data Systems, 105(5/6), 549–560.Retrieved from ABI/INFORM