Outsourcing at Office Supply Inc. Case

1624 words 7 pages
Office Supply Incorporated (OSI) is a company in crisis, with challenges in its cost structure and poor IT performance. Outsourcing to Technology Infrastructure Solutions (TIS) is an opportunity to both reduce costs and complexity for the firm, but first must consider whether outsourcing is a good strategic fit for OSI. Outsourcing is known as the practice of turning over responsibility of some or all of organizations information systems to a foreign firm in order to stay competitive. Outsourcing is not new to the business world, as it dominated the manufacturing sector the past couple of decades. There are various advantages and disadvantages. Advantages include lower costs, better quality, and downsizing to focus on the
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Third, under intense cost or competitive pressures, which does not see IT as its core competence, would find outsourcing a way to delegate time-consuming, messy problems so it can focus scarce management time and energy on other differentiators. Also, outsourcing can turn a largely fixed-cost business into one with variable costs. Outsourcing has identified numerous potential benefits. Financial benefits from outsourcing included rapid funding of new systems development and economies of scale and scope. As consolidate infrastructure through IT outsourcing, a firm can experience cost reductions in hardware and software licensing, facilities, and support headcounts. Outsourcing, also, can capitalize on an outside vendor's extensive IT problem solving knowledge. An outside vendor had the ability to get more of the technology that came out. They could spend money on investments that a company could not afford internally. That opens up a lot more avenues to future technologies. An outside vendor would manage the IT function more efficiently. A vendor's main competency is managing computer systems. Through their skills, leverage, and economies of scale, they could provide a level of efficiency that could not be achieved at the outsourcer. Finally, Perhaps most important, outsourcing allow internal IT managers to focus on the development of a new IT infrastructure. Underlying the outsourcing effort is a fundamental strategy to offload legacy applications and


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