Discussion of Outsourcing and Its Pro and Cons Assignment

Discussion of Outsourcing and Its Pro and Cons - Assignment Example The IT functions include but not least software development, maintenance or support services in which the company deems cheaper to operate (Gartner, 2013). This occurs when an organization finds that it's cheaper to contract a third party to manage it IT than building an in-house IT department, or out-source a software or data storage than buying and maintaining its own. IT insourcing is acquiring or taking back the IT functions that have been previously been outsourced to a supplier or a third party provider (3P). In insourcing, the company takes control of the valuable business process and cease entrusting the functions to a 3P. The main difference between insourcing and outsourcing comes in the cost of the company, hence insourcing is more expensive as the company has to start from scratch whereas outsourcing the work is already flowing and the employees are familiar with the job (Marquis, n.d.). To achieve the same results insourcing firm uses its own acquired resources whereas in case of the outsourcing the firm uses the resources of the 3P. Insourcing involves placing a new location site for the operation site within the confines of the four walls of the organization, whereas involves using a facility that it’s outside the vicinity of the company. The insourcing the firm has total control of the employees and IT business process; whereas in outsourcing the management lacks or has no control over the way 3P operates (Marquis, n.d.). IT offshoring is relocating of IT business process from the primary country to another one to lower the administrative costs or due to lack of expertise in the primary country. This is mainly to take advantages of local resources, reducing costs and increasing the local market share; offshoring firm does not lose the ownership and the operations remain intact and unchanged (Lu, 2011).