Info 3 - External and Internal resources

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  • Created by: Callum
  • Created on: 07-01-13 14:14

External and Internal resources

External Services:

  • Small businesses may have neither the time nor the expertise to do so and may choose to concentrate on their core business whilst allowing someone else ot look after their ICT.
  • It would not be econically viable to appoint someone to a job that might only take a few hours a month but needs to be done well.
  • Would be better to pay another business to handle your payroll, invoicing and accouting.
  • Specialist company can off a wide variety of servics coverting most of the functions of organisations,
  • Ranging from standard office support function, such as payroll, billing, telepone call centres customer support, bulk printing and storage.
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External and Internal resources

Outsourcing: The transfer of a function of an organisation to an external company that provides this service.

Off shoring: The transfer of an organisational function to another country, regardless of whether the work is outsourced or stays within the same corporation.

Multi-Sourcing: A framework to enable services to be sourced from more than one service company.

On-Demand: Involves making computer resources available to the client organisation as and when needed.

Utility computing: A computing service that the customer pays for according to how much they use.

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External and Internal resources

Reasons for outsourcing:

  • Improved quality
  • Staffing issues
  • Capacity management
  • Cost benefits
  • Economics of scale
  • Reduced development time
  • Standardised business processes
  • Imporved risk management.

Offshore provision:

In certain circumstances it may prove beneficial for an organisation to use a service provider that is not based in the UK or to move certain parts make some of their own operation abroad.

One well known and sometimes controversial use of offshore provision is the move by some large UK companies to call centres based in india rather than in the UK.

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External and Internal resources

Benefits and limitations of offshore provision:

  • Labour and facilities may be cheaper abroad, resulting in cost savings
  • Specialist skills may be more readily available, again at lower costs
  • Some countries may offer financial incentives to encourage new business
  • the jobs and investiment may be extremly valuable to the local economy
  • Assists the global exonomy by providing work to less wealthy areas of the world
  • language and cultural differences may cause difficulties
  • communications costs may be higher
  • legislation may be different abroad and so it is important to ensure that, for example, rights under the data proteciton act are not breached.
  • security risks may be increased as the organisation moves away from local control.
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External and Internal resources

Ways of obtaining services:

- Buying hardware, software and equipment

- Contracting people, work space and equipment

- Leasing software, communication links and equipment.

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External and Internal resources

 Managing internal resources:

  • People
  • Hardware resources
  • Software resources
  • communication resources 
  • consumables
  • facilities
  • power
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