Outsourcing of Information Technology Services Research Paper

Outsourcing of Information engineering science Services - Research Paper modelDell had a unique business model and was the pioneer in selling computers through their website. They did manage to maintain direct customer contact and extend overhead through elimination of intermediaries, through maintaining low inventory, low finished inceptions, and their outsourcing customer support and expediency. However, the reduced overheads nooky be eroded, as in the drive of Dell, when they had to suffer damaged reputation and cash expenditure to restore its position. This was despite their strategy to outsource only subassemblies and have control over the final visitation and assembly. There was misalignment between the organizational goals and its long-term strategy. IT outsourcing must necessarily be aligned with business goals and have a long-term perspective. Introduction Outsourcing of Information Technology (IT) services has been in practice by organizations for several reasons. O rganizations typically delegate their non-core functions to outside service providers on the assumption that the external service provider delivers the service faster, better and at a cost lower than what the enterprise can achieve by itself (Young, 2010). ... However, an organization would have achieved success and effectively reduce overheads if it can offer product differentiation, reduce costs, maintain efficient supplier relationships, communicate directly with customers, if it can maintain flexible manufacturing to suit individual customer needs, if it has a culture for keeping costs contained while maintaining efficiency. Overhead expenses could include expenses that argon not attributed to any specific business activity but nevertheless undeniable for businesses to function. These could differ across sectors and organizations but include expenses such as rent, utilities, and insurance. Based on the case of Dell Inc, this paper would evaluate the extent to which outsourcing has changed the effectiveness in reducing overhead expenses. Dell company strategy Dell has been one of the pioneers in mass customization and a premier supplier of technology for internet infrastructure. They are widely recognized for their built-to-order (BOT) business model. Customers can order customized orders and only when the order has been placed the system is built as per customer specifications. Dell does not stock any inputs but has an extranet that connects it with its suppliers. Dell has a network of 200 suppliers and each of them can access the secure extranet and view Dells report on production plan, material demand, material quality, negotiated and forecasted cost reports (Pollard, Chuo & Lee, 2008). Dell outsources subassemblies and standard and non-configurable components. To maintain quality dell retains the key final assembly and configuration processes. It ties up for substantial components with suppliers with