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The Choice between Outsourcing, Insourcing and Selfsourcing

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Yusuf Saheed

on 1 July 2014

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Transcript of The Choice between Outsourcing, Insourcing and Selfsourcing

Definitions
Limitations and Future Research
The Choice between Outsourcing, Insourcing and Selfsourcing
The Choice between Outsourcing, Insourcing and Selfsourcing

Supervisor: Dr. Akinnola Akintunde N.

Yusuf Saheed Adedire
Whats Outsourcing?
Outsourcing is the transfer of a business activity or business process to a third party.

It can also be defined as contracting a third party to manage a business process more effectively and efficiently than can be done in-house

Whats Insourcing?
Insourcing is the opposite of Outsourcing, rather than buying services from a third party, you obtain the resources required to provide the services Internally.

It is also defined as bringing a third party
outsourcer to work inside a company’s facility.

Whats Selfsourcing?
Selfsourcing is the internal development and support of a process or IT system by knowledgeable workers with minimal contributions from IT specialists.

“Self-sourcing means additional responsibility for the workers”

By
Aim of Study
The purpose of the research was to identify the major factors that determine success or failure in each sourcing concept and come up with a method or process to help simplify the decision making process and minimize risk.
Objectives
1. Definition of Terms:
Outsourcing
Insourcing and
Selfsourcing.
2. To identify the Advantages and Disadvantages of Terms.
3. To identify the Reasons behind each Concept (Why).
4. To the identify the Implications of our Decisions.
5. To identify the cause of failure in each Concept.
6. To come up with a model that helps
minimize risk.

Chapter 1: This chapter presents the background of the study, the statement of problem, aim of the study and objectives of the study.

Chapter 2: This chapter contains the review of literature relevant to the study.

Chapter 3: The research design and methodology used are explained in this chapter, the data collection techniques are also discussed within.

Chapter 4: This Chapter presents the findings and the analysis of result.

Chapter 5: This chapter contains the conclusion and recommendation.
When a new IT system is to be formed/created for an organization, one of the first choices to be made is the form of execution between (different forms of ) Outsourcing, Insourcing and Selfsourcing.
Although a lot of information exists about the advantages and disadvantages of different approaches, in reality many projects still end up in failure due to wrong selection.
Restarting a project using a different form of execution comes with a major loss in time and money and there is no guarantee once again of its success. Even if the initial stages are successful, there are no guarantees for a long term success as problems can still arise in later stages after the system is in operation.

Statement of Problem
Low response rate
Limitations
Variation in Demography
Variation in Years of Operations
Future Research
blending all sourcing concepts in order to achieve all the goals of an organization.
Findings
Reasons for Outsourcing failures
Hiring the wrong vendor/Contractor
Setting unrealistic goals
Inflexible Contracts
Inadequate contract details
Shortsighted
Having limited or poor understanding of expectation
Inadequate management review.
Reasons for Insourcing failures
Insourcing because outsourcing has gone wrong (Big Mistake).
Hiring the wrong specialist.
Inadequate contract details.
Lack of motivation
Work overload
Poor understanding of expectation
Unwillingness to spend
Shortsighted
Insourcing can be as problematic as outsourcing, and it’s usually more complex to execute. It shares some major reasons for failure since it has something to do with contracts and agreement
Reasons for Selfsourcing failures
Project Structure
Methodologies
Questionnaire was designed using an online based survey system called questionpro.
The questionnaire was then distributed by sending links to respondents via emails.
The data collected were analysed using Microsoft excel and some of the reporting features on questionpro
And an interview was also conducted to backup our findings from the questionnaire.
www.questionpro.com
Methodologies
Recommendations
Our findings show that sourcing concepts are not to blame for failure, rather the organizations lack of understanding of how the sourcing concept works. No sourcing concept is a
SILVER BULLET
in solving any organizations IT problem
Recommendations
Platform for success
It is also important to know that when it comes to time factor: insourcing and selfsourcing is more suitable for shorter projects, while outsourcing has proven its effectiveness over medium and longer projects.

It is also important that when discussing the goals of IT, an expert in that field should be present or perhaps a member of the management should be an IT specialist so as to guide with all the pros and cons involved in all sourcing concepts available.
Conclusion
Thank You!!!
Any Questions
In conclusion, the research presents:
The impact of sourcing concepts on organizations competitive edge, the factors that motivate organizations decisions (i.e. to either use outsourcing, insourcing or selfsourcing).
The factors that lead to failure of sourcing concept adopted by organizations.
The implications of each sourcing concept on organizations and their environments was also presented.
Data collected from questionnaires were analyzed to discover or get answers to all the questions presented.
The results suggested that the failure in IT process is down majorly to the lack of clearly stated goals by organizations, wrong choice of sourcing concept and the lack of understanding (by the management) of what each concept can achieve.
And finally, Recommendations, some identified limitations and future research was presented.
Conclusions
The following are some of the charts from our findings
Findings
Performance of each sourcing concept in cost reduction
Years of operation
Factors that motivates Insourcing or Selfsourcing
Findings
Findings
Findings
Recommendations
Limitations
Limitations
Full transcript