In this lesson the topic is about outsourcing and partnership. Companies are realizing that they must concentrate on their core business to help the organization grow and have IT help with this process. Identified IT Core business functions bring value to the business, which the organization can put more time and resources to developing.  The development of the core functions is done in-house and is not considered for outsourcing. Once the core functions have been recognized organizations must look at other functions that contribute to the business process but don’t have the expertise or the resources so they must either bring in help (insource), find a vendor (outsourcing) that is experienced in providing the services for the functions required or partner up with another company that has more resources and is more experienced in these functions. When organizations look to outsource it provides a way to lower their cost and to find companies that provide services that they specialize in. This saves the organization in costs because they do not have to invest in new technology and training or hiring more IT staff.

When it comes to outsourcing there are some issues and risks that are involved. Some of the issues include a language barrier, if the outsourcing is given to a company that is located in a different country depending what IT function is outsourced there could be issues with the language. I know from experience that when I have called companies help desk it was answered by someone not located where theit company was and had a difficult time understanding and communicating what I needed done. Other issues include timing, or political barriers if IT functions are being outsourced to vendors in different countries. Organizations lose control of these functions, as they are not there to oversee the process. Organizations must consider these risks when they are planning to outsource certain functions because this could hinder or cost them business. I believe that organizations should outsource functions that are low on the organizations metrics such as help desks or web development and maintenance. Outsourcing these functions could save on costs.

As (McKeen & Smith) state that there are five stages for IT function delivery and four types of delivery options. If a function is Unique this will give an organization an advantage in the marketplace so an organization should find resources to develop it in-house. This will allows the organization to have full control and oversee the process. If a function is Common it provides services that does not provide advantage for the business but provides important services (e.g. HR).  Organizations can insource this type of function, as they do not have to hire new staff or train staff. They can bring in a specialist that could handle this function on a contract, which could save on costs. Another type of function is Standardized. This function provides common tasks and services that follow certain standards set out by governments and agencies (McKeen & Smith). Partnerships are formed with other organizations that can provide these services. The other two functions Commoditization and Utility both are functions that can be outsourced. Different companies specialize in these services so it would be cost effective to outsource these functions.  

Deciding on what type of delivery option an organization should use is important in saving cost and having control of important functions. Identifying core IT functions is the first step. As the core IT functions delivery option will be in-house the next step is determining delivery options of the non-core IT functions. (McKeen & Smith) use a function delivery profile chart. I think this would be very beneficial tool for organizations to determine the core functions and the delivery options.

As organizations grow they will need to focus on the core functions more and more and will require services from external sources. Developing relationships that provide incentives with external vendors will be key in getting quality service at a reasonable cost in turn this will help with business growth. I believe as IT gets more involved in business processes you will see a greater need for external IT vendors who can provide cost effective services.