Outsourcing information systems: A strategic partnership with risks

As information processing and telecommunications technology increase in sophistication and complexity, organizations are finding it more difficult to manage their information systems (IS) for business success. Growing numbers are now sharing these responsibilities and risks with outsourcing vendors. American Standard, Eastman Kodak, General Dynamics, Metropolitan Life, and Young & Rubicam are prominent companies which have outsourced some or all of their IS activities. They are looking to gain competitive advantages by cutting costs and focusing internal resources on core activities. However, compromises in management control and data security, the potential of hidden costs, and the difficulty of reversing the process mean that long range planning and considerable analysis should precede a decision to outsource. Successful outsourcing implies forming a mutually-beneficial strategic partnership. © 1993.