Information Technology Outsourcing Strategies for a Manufacturing Firm

Abstract

To outsource or not to outsource its internal IT department? That is the question that many firms have been asking themselves. Outsourcing has been around for more then 20 years in the different manufacturing areas. At first, companies decided to outsource the manufacturing of components in countries which would be bringing cost benefits by reducing the overall cost of their products. With the Internet gaining momentum as a quick and reliable source of information transmission, many manufacturing firms are now evaluating the possibility to outsource their IT functions in order to focus their energy, efforts and capitals on core-competencies thus reducing costs and improving quality of their IT services. From the literature review, we understand that cost reductions could be obtained, but they are usually less impressive than estimated in the preparation of a typical IT outsourcing business case. The overall objective of this dissertation, through the study case of a manufacturing business (THE COMPANY), is to build a framework that will take into account all the elements necessary for a manufacturing firm to accurately evaluate the strategic initiative of outsourcing its internal IT functions in order to achieve not just cost reductions, but improved value for the users performing activities with these technological tools and processes.