This relates to Information Systems Procurment

The Context

Information Technology Procurement (ITP) portrays consistent adaptations to the turbulence in the information technology field and external business pressures. In the current pandemic, organisations have realised that allowing business units to purchase their own IT is more beneficial. The need to adapt and innovate quickly and create supplier relationships with the business units is the key driving force to decentralised ITP. However, this has made many overheads in IT governance: the IT portfolio is diverse and growing at pace, and the distributed procurement decision-making. However, ITs cost in organisations remains a huge concern, with both the Chief Information Officers (CIOs) and Chief Procurement Officers (CPOs) being under increased pressure to tame IT costs while increasing the return on existing IT. Several IT disruptors and outsourcing providers have made procurement decisions more challenging and competitive while making IT easy to use, more accessible, and initially low-cost by moving to service-based procurement. Therefore, the CIOs and the CPOs must continuously guide and lead business units in the analyses of costs, benefits, risks, and rewards of keeping the development of IT in-house or outsourcing to the providers.

Question 1: Complete the matrix below. You are required to provide the reasons or circumstances that would be applicable for making a decision for either in-house development or outsourcing. The first line is completed to give you an example of what is expected. [16 Marks] [Max 30 words per reason]

Main consideration	Key attributes	Outsource	In-house development
Business strategy	The attractiveness of business processes	Processes not critical to the end products/services	Strong internal business development for differentiated services/products
	IT supply markets
	IT disruptors
Risks	Supply or hold-up risks
	International supply market risks
	Intellectual rights protection
Economic/cost factors	Operating performance advantage
	Initial capital requirements and expected returns
	Skills and experience availability

Question 2: Using the Resource-Based Views VRIN characteristics, explain how you, as the CIO, could guide and lead an organisation in analysing the decisions to outsource IT or to keep it in-house. In your guide, explain how the increase in the number of either IT disruptors or outsourcing providers affect the analysis. [12 Marks] [Max 600 words]

	Mark allocation: Guidance : 2 * 4 ; Effect of IT disruptor/outsourcing providers: 1 * 4
Value
Rare
Inimitable
Non-substitutablee

Question 3: Traditionally, the need to outsource IT was driven by cost. However, the IT disruptors and the rate of innovation has recently become one of the key drivers of IT outsourcing. [14 Marks]

1. Discuss two challenges of cost-based IT outsourcing decisions. [4 Marks] [Max 250 words]
2. Discuss two reasons why increasing the number of your IT suppliers (increasing outsourcing) could help an organisation benefit from consistent IT innovations. [4 Marks] [Max 250 words]

Question 4: Whether an organisation undertakes in-house IT development or outsources its IT, it should monitor the performance of IT procurement process, and the procured IT assets. The metrics and Key Performance Indicators (KPIs) provide a guide for monitoring future IT procurements and the costs, benefits, risks, and rewards of the IT assets. [8 Marks]

1. Discuss two process-based KPIs that can be used to measure the ITP process when dealing with multiple IT suppliers. [4 Marks] [Max 250 words]
2. Discuss two metrics that can be used to measure the performance of procured IT assets when dealing with multiple IT suppliers. [4 Marks] [Max 250 words]