Answered: IT outsourcing arrangements with…

Business

Management

IT outsourcing arrangements with specialist companies

Understanding Business

12th Edition

ISBN:9781259929434

Author:William Nickels

Publisher:William Nickels

Chapter1: Taking Risks And Making Profits Within The Dynamic Business Environment

Section: Chapter Questions

Problem 1CE

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Question

To support its operations today, an organisation has to decide whether to outsource or retain its operations internally. In the past, Vodafone has entered various IT outsourcing arrangements with specialist companies. Describe what is meant by IT outsourcing. Utilise the Transaction Cost Theory to discuss Vodafone’s outsourcing decisions. Has Vodafone managed to retain its core competence given its outsourcing arrangements?

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Step 1 Outsourcing is an efficient downsizing measure.

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Step 2 Outsourcing enables division of labour.

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Step 3 Vodafone signed a global outsourcing deal.

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