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What constitutes IT Outsourcing?



The different functions that are outsourced in IT include the following:

  • Application service provisioning (ASP): Application service provisioning is outsourcing of business application hosting from a third party vendor (application service provider) in stead of doing it in-house.
  • Applications management: As the name suggests, it is outsourcing of management of technologies and business applications.
  • Consulting and reengineering: IT consulting and reengineering involves identifying the problems in an existing or desired information system and offering optimal solutions for enterprise efficiency.
  • Client/server: A server is a device connected to a network that manages network resources. Vendors provide shared as well as dedicated servers and services related to them to companies.
  • Data entry and conversion: This involves outsourcing of data entry and conversion processes. The vendor carries out automated data entry tasks such as database management, financial bookkeeping, claims settlement and customer support data.
  • Data networks: Data network outsourcing is housing the data network and data equipment of a company at the vendor site. Vendors provide safe and reliable data transmission through superior bandwidth and supporting facilities.
  • Desktop systems: Desktop systems outsourcing involves outsourcing infrastructure support, on-site systems support, desktop and LAN management and help desk services. The prime aim of outsourcing desktop systems is to cut costs.
  • Distributed systems: Distributed systems outsourcing involves hosting client/server technologies along with provision of system and network monitoring and administration services.
  • E-commerce: E-commerce outsourcing involves specific functions such as web design, development and operations as well as sale of e-business products.
  • End-user support systems: Companies prefer to outsource the support and maintenance of their daily use equipments such as servers, PCs, printers, laptops, network components, and other PC peripherals. Outsourcing these support and maintenance tasks enables the companies to focus on their core competency.
  • Imaging and OCR services: Imaging and OCR services involve digitally capturing and managing documents. Vendors provide a wide range of value added imaging and OCR services such as automated invoice processing, Internet document management, Intranet and extranet data hosting and handling, and inbound mail conversion.
  • Internet/Intranet and web hosting: Outsourcing vendors provide superior Internet, Intranet and web hosting services at a cheaper price. Vendors also have access to technologies and methodologies of making a system secure and hence guarantee a protected service to the buyers.
  • Mainframe data centers and infrastructure: Vendor provide storage, computing and network resources with the aid of superior technology and processes which are not available to many buyers due to huge cost. Data center outsourcing also involves providing additional services such as operational and technical support for the network along with system security.
  • Security control: Due to the high importance of security required for protecting business data, companies outsource a range of services such as security evaluation, monitoring, system assessment and intruder detection.
  • Systems integration: System integration involves integration of software and hardware components, networks, enterprise application and legacy to web migration.
  • Testing: Many companies want to test their software quickly to bring their products fast into the market. In such cases outsourcing the testing function is an excellent option available to these companies.

Within a given project there are various tasks such as testing, coding, maintenance, requirements gathering, architecture and business integration. IT outsourcing is now witnessing shifting of low end tasks such as testing and maintenance to high end jobs such as system integration and R&D to vendors. The percentage of projects partially or completely outsourced in software development for different tasks is given in the report ‘Outsourcing Basics’.