31Ame21 A medium sized consumer durable manufacturing company outsourced all IT services including systems development, maintenance...
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31Ame21 A medium sized consumer durable manufacturing company outsourced all IT services including systems development, maintenance and system support five years ago to a IT systems company. However, the Finance Director is now very concerned about the growing costs of the outsourced IT services, which have increased by about 25% each year. He feels that it is time to bring all IT services back in-house to be managed by the small in-house IT team; otherwise the company will incur a heavy cash outflow which may impact the budgets. The Chief Executive Officer disagrees and feels it would be a mistake to bring IT back in-house. The CEO identifies 3 plans of actions as follows: acturing 72-20 including 8b1651 3/05/21 18b1651-82772-20 Officer 5/21 a. Renegotiate the contracts with outsourcing parties b. Augment the local IT team and bring the IT services inhouse c. Identify a SaaS partner with whom the present small team can interact and establish the IT systems. ate272-2023/05/21 As a MIS specialist, discuss the pros and cons for each of these strategies that would help the management take an appropriate decision. [10 marks] 31Ame21 A medium sized consumer durable manufacturing company outsourced all IT services including systems development, maintenance and system support five years ago to a IT systems company. However, the Finance Director is now very concerned about the growing costs of the outsourced IT services, which have increased by about 25% each year. He feels that it is time to bring all IT services back in-house to be managed by the small in-house IT team; otherwise the company will incur a heavy cash outflow which may impact the budgets. The Chief Executive Officer disagrees and feels it would be a mistake to bring IT back in-house. The CEO identifies 3 plans of actions as follows: acturing 72-20 including 8b1651 3/05/21 18b1651-82772-20 Officer 5/21 a. Renegotiate the contracts with outsourcing parties b. Augment the local IT team and bring the IT services inhouse c. Identify a SaaS partner with whom the present small team can interact and establish the IT systems. ate272-2023/05/21 As a MIS specialist, discuss the pros and cons for each of these strategies that would help the management take an appropriate decision. [10 marks]
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Answer rating: 100% (QA)
a Renegotiate the contracts with outsourcing parties Pros 1 Cost reduction Renegotiating the contracts with the outsourcing parties can provide an opportunity to negotiate lower service fees or obtain ... View the full answer
Related Book For
Management Accounting Information for Decision-Making and Strategy Execution
ISBN: 978-0137024971
6th Edition
Authors: Anthony A. Atkinson, Robert S. Kaplan, Ella Mae Matsumura, S. Mark Young
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