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Outsourcing

With any ongoing service, it is useful to ask whether it is best performed in-house or outsourced to a specialized organization. Internet commerce is no different, and the rapid evolution of Internet technologies can often make it difficult to keep up without some assistance. Forrester Research developed one model of an outsourcing strategy, shown in Figure 7-1. It consists of four phases.

  1. Early outsourcing. In the beginning stages, an IT organization can create a system more quickly and begin to develop the requisite skills by calling on the expertise of outside specialists. Such specialists typically develop expertise in new technologies more quickly than do large corporate users.

  2. Internalization. If the first phase is successful, IT groups who have already begun to develop the necessary skills can take over from the early outsourcing. The new skills, combined with detailed knowledge of the business, make it possible to expand deployment as well as customize the application to meet the specialized requirements of the business.

  3. Centralization. As a technology spreads, it becomes possible to support the systems across the enterprise. This requirement, combined with the need to limit expenses, moves responsibility for the system to a central IT group.

  4. Late outsourcing. As an application moves to legacy status, it may be important to continue operating it, but it may no longer be a core part of the business. In addition, it may also distract an IT team from learning new technologies and developing new business opportunities. At this stage, outsourcing it to a specialized company may be especially attractive because the outsourcers can create economies of scale for operating similar applications for many customers.


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