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Computer Systems. Insourcing and Outsourcing

The purchase of a new software package is important to an organization for efficient operations. Such a decision should never be taken lightly and the organization should exhibit strong leadership skills and a clear understanding of the needs of the company or the organization. The new system should be able to provide the company with long years of productivity, it should also provide efficient service to the company and its cost should also be within the financial capacity of the organization.

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One of the major things to consider when purchasing a new system is integration whereby the new system should encourage the integration of data in the company. This is important as it will create integration in the departments and help in cutting down costs on maintenance and support, hours of extra work for staff, and also increase the clarity of the information being stored.

Companies purchase new software to streamline the operations in the company, to improve staff productivity and to store information for future use. The new computer system should therefore be able to allow the exportation of data or information (Explorers systems Inc. para. 4). When making a decision on the best computer system, it is important to have the company’s best interest at heart. This means therefore that the decision to purchase a new system should never be an individual decision but for the whole organization; it should be done after a number of consultations with the other stakeholders in the company. The system should be one that can allow upgrading in case of any advancements in the level of technology (Explorers systems, Inc. para. 6); a common phenomenon in the software and business environment. The system should be very reliable and it should also be able to generate reports and information. In addition, the package should be able to operate in an easily available environment, the cost should be affordable to the company and lastly, the system should be easy to use especially after the staff has been trained on how to use it.

Quite several times, the companies are faced with the decision to either produce their own computer systems (insourcing) or to purchase them from the company’s chain of suppliers (outsourcing), such a decision is referred to as a make or buys decision.

Insourcing at times is preferred by some organizations because it enhances the degree of control the company has on the desired outcome of the computer system. It also gives the organization the authority to oversee the entire process and it is also quite cheap for the company to produce its own computer systems. Insourcing though, has the disadvantage of lacking the strategic flexibility; this is especially when there is need to install new software to support the original one although the decision to change from the original at times takes quite a long time. To start off an insourcing initiative is a no child’s game because it requires a high capital input and at times such a decision has left some companies in a state of bankruptcy. Insourcing may also be undesirable as a result of the fact that the suppliers may be offering products of a superior quality than what the company is out to produce for itself.

Outsourcing of computer systems from the company’s chain of suppliers is in some cases important for the company because it allows the flow of cash from the company which is important for the company’s growth (Schniederjans 2). It enables the companies to have access to high-quality products as compared to those they are likely to produce for themselves if they take onto the insourcing decision (Schniederjans, 2007). It also allows the company to have a high strategic flexibility and it is less risky in comparison to insourcing.

The problem with outsourcing is that there is a high chance of choosing a bad supplier who will end up supplying substandard computer systems to the company (Bucki para. 3). Outsourcing does also limits the company’s control over the kind of technologies it wants. This is because the company is forced to adjust its needs and specific requirements to the already pre-designed computers from the computer firms. Moreover, outsourcing has been associated with bad publicity especially when the public realizes that the company is sourcing for its appliances from outside their region at expense of the ones produced locally (Bucki para. 4)

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Outsourcing interferes a lot with the security and the confidentiality of the company (Bucki para. 7), more so in terms of the financial status of the company. It may turn disastrous if such information is used negatively to blackmail the company. Outsourcing has also proved quite expensive in the long term mainly because, once the contract has been signed the company will be obliged to cater for all the other costs that come with outsourcing which may include the hiring of a lawyer to review the contract

In a nutshell, the purchase of a new computer system or any other technology is a very crucial step in the growth of a company. Care should therefore be taken to ensure that the choice made is the best for the company and that its marginal benefits are greater than its marginal costs. Both outsourcing and insourcing are important as far as the purchase of new technological appliances in the company is concerned. Both insourcing and outsourcing are important but in case a company wants to sell its name, it may be important that it considers insourcing which will allow it to design and produce its own equipment. It is also important to consider insourcing if the company is keen on preserving its security and confidentiality. In a case where the company needs bulk supply on short notice duration, outsourcing may just be the best option.

Works Cited

Bucki, John. “Top 6 Outsourcing Disadvantages.” About.com. 2010. Web.

Bucki, John. “Top 7 outsourcing advantages.” About.com. 2010. Web.

Explorers systems Inc. 10 things to consider when investing in a new software package for your museum. 2006. Web.

Schniederjans, Ashlyn. M. Outsourcing management information systems. PA, Idea group Inc. 2007.

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StudyCorgi. (2021, November 25). Computer Systems. Insourcing and Outsourcing. https://studycorgi.com/computer-systems-insourcing-and-outsourcing/

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