Textbook : Managing & using information systems. Sevent edition

INFORMATION SYSTEMS SOURCING Examples of Associated Risk in Worst-case Scenarios Suggests Insourcing Suggests Outsourcing If outsourced: Loss of control Make or Buy Questions No over strategic initiatives; loss of Yes Does it involve a core competency? strategic focus If outsourced: Competitive secrets may be leaked No Yes Does it involve confidential or sensitive IS services or software development? No If insourced: Project not completed on time Yes Is there enough time available to complete software development projects in-house? No Yes Do the in-house IS professionals have adequate training, experience, or skills to provide the service or develop the software? If outsourced: Technological innovations limited to what provider offers; overreliance on provider's skills If outsourced: Project not completed or, if completed, is over budget and late when another provider takes it over Yes No Are there reliable outsourcing providers who are likely to stay in business for the duration of the contract? Yes If outsourced: Conflict between client and provider personnel Is there an outsourcing provider that has a culture No and practices that are compatible with the client? Does the provider have economies of scale that Most likely no make it cheaper to provide the service or develop the software than in-house? Most likely yes If outsourced: Excessive costs of project or operations because of the way the contract is written Does it offer a better ability to handle peaks? If insourced: Loss of business Most likely no Most likely yes Does it involve consolidating data centers? Most likely no Most likely yes If insourced: Inefficient operations FIGURE 10.2 Make or buy? Questions and risks. 11.59 PM For each of the three organizations below, use the textbook Figure 10.2 and the chapter information on outsourcing as a guide, address the following two points: . Recommend whether the organization should build or buy/outsource the system in question. Explain your answer. What additional information would be useful in making your recommendation? Organizations: 1. A medium-sized company that sells roofing materials to contractors needs a system that will allow customers to check product inventory through a website. 2. A large (Fortune 500) retailer with a large, well-skilled IT department needs a system that will track the purchasing habits of its frequent customers. 3. A large (Fortune 500) defense contractor needs a system that will track payments to vendors