Outsourcing-pros and con

Outsourcing The reliance on outsourcing as a means of providing information technology (IT) services has been growing steadily over the past decade. It was recently estimated that IT outsourcing would reach US$ 156 billion in 2004 (Lacity & Willcocks, 2000). The facts that firms are increasingly turning to external suppliers in order to meet their IT needs does not mean that outsourcing is a panacea or that it is without problems. While it may help clients achieve …

…also arise as a result of you not being able to control the firm especially in case where the outsourcing is that of offshoring. Loss of control, declining rate of innovation, low performance, high transaction costs, other hidden cost including loss of key IT employees and dissipation of competitively relevant knowledge, including loss of absorptive capacity to monitor technological advance as well as motivation loss of remaining employees are all risk associated with IT outsourcing.