IT system development

Outsourcing Proposal and RecommendationOutsourcing Proposal and Recommendation

for

Ingleburn Health ClinicIngleburn Health Clinic

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Overview Overview

1. The task and scope2. Types of outsourcing3. What type we recommend4. Ingleburn readiness5. Outsource process6. Vendor selection7. Typical costs8. The risks9. Quality aspects10. Summary and our conclusion11. References12. Questions and answers

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The Task and ScopeThe Task and Scope

• Recommending the outsourcing approach that Ingleburn needs to follow

– Onshore and why?

• Processes related to the selected onshore outsourcing

• Important concerns relating to these processes

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Types of OutsourcingTypes of Outsourcing

• Onshore - Onshore outsourcing is also called as domestic outsourcing, which

consists of both domestic vendors and domestic clients. Which means that both (vendor and client) organizations are located in same country.

• Offshore

-the vender is overseas

Hirschheim,R., Heinzl, A., & Dibbern, J. (2006)

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• We recommend onshore outsourcing

To avoid possible risks such as:

1. Offshore outsourcing hidden costs

2. Deficiency arising due to cultural differences

3. Communication / coordination complexity

4. Legal and data privacy issues with countries

What Type We RecommendWhat Type We Recommend

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Ingleburn ReadinessIngleburn Readiness

Things to do:

• Clear understanding of the goals, objective scope of outsourcing project.

• Select a reputable vendor.

• Vivid communication of requirements to vendor.

• Good open Communication.

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Ingleburn ReadinessIngleburn Readiness

• Contract negotiation and signing.

• Proper top management support.

• Good project management expertise.

• Management of user expectations.

• Adequate user involvement.

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Outsource ProcessOutsource Process

• Strategic Evaluation

• Contractual Completeness

• Relationship Management

• Outsourcing Performance

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Vendor SelectionVendor Selection

• Vendor selection problems price, quality, prestige-service

• General methods of vendor selection Total cost approach, Total cost of ownership, Analytic

hierarchy process

• For the case medical knowledge

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Typical CostsTypical Costs

• The hidden costs – They are not negligible

• Includes:Finding the vendorDrafting the contractsManaging the efforts

• Understand what goes into the cost and when to expect them

•Barthe´lemy, J. (2001)

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The RisksThe Risks

• Original set of requirements is miscommunicated

• Failure to manage end-user expectations

• Lack of project management

• Inadequate user involvement

• Lack of top management support

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Quality AspectsQuality Aspects

• Well documented Manuals & coding standards.

• Software reliability and correctness

• Completeness

• Efficiency

• Usability

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Summary and Our ConclusionSummary and Our Conclusion

• Go with onshore outsourcing to avoid unnecessary risks

• Prepare properly for outsourcing so as to:– Be prepared for the costs– Minimise risks and– Quality product with requirements met

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ReferencesReferences• Barthe´lemy, J. (2001), “The hidden cost of IT outsourcing”, MIT Sloan Management Review, Vol.

42 No. 3, pp. 60-9.

• Chou, D.C. & Chou, A.Y. (2009), "Information systems outsourcing life cycle and risks analysis", Computer Standards & Interfaces, vol. 31, no. 5, pp. 1036-1043. •

• Hirschheim,R., Heinzl, A., & Dibbern, J. (2006) The Maturation of Offshore Sourcing of Information Technology Work, Springer Berlin Heidelberg

• Gonzalez, R, Jose Gasco and Juan Llopis (2006) Information systems offshore outsourcing A descriptive analysis Department of Business Organisation, University of Alicante, Alicante, Spain

• Kuipers, Joost Visser, Gerjon de Vries (2008), Monitoring the Quality of Outsourced Software Tobias •

• Nakatsu, R.T. & Iacovou, C.L. (2009), "A comparative study of important risk factors involved in offshore and domestic outsourcing of software development projects: A two-panel Delphi study", Information & Management, vol. 46, no. 1, pp. 57-68.

• Sean M. Handley a, W.C. Benton Jr.b, (2009) Unlocking the business outsourcing process model

• Tafti H.A. (2005) Risks factors associated with offshore IT outsourcing Mohammed

• Vijay Wadhwa, A. Ravi Ravindran (2007) ,Vendor selection in outsourcing. Computers & Operations Research 34 3725 – 3737.

• Willcocksa, L.P. , Lacityb, M.C. Kernc., T. (1999), Risk mitigation in IT outsourcing strategy revisited: longitudinal case research at LISA

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Any Questions ?Any Questions ?

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Thank you !