A Framework for Deciding what to Outsource in Information Technology

1995 ◽  
Vol 10 (4) ◽  
pp. 259-267 ◽  
Author(s):  
Jonathan Cronk ◽  
John Sharp
Keyword(s):  
Information Technology ◽  
Cost Reduction ◽  
It Outsourcing ◽  
Market Mechanisms ◽  
Organizational Complexity ◽  
The Cost ◽  
General Perspective ◽  
Number Of Authors

The theory and background of outsourcing are examined from a general perspective. It is concluded that the pressures to outsource activities can best be understood through two main sources: the work of organization theorists on the management of organizational complexity and the transaction economics approach of Williamson which argues the virtues of provision of many organizational services through market mechanisms rather than by internal departments. Within IT, the early motivation for outsourcing was the cost reduction one implied by the Williamson approach. However, a number of authors have argued that the complexity of managing IT outsourcing means that it is often preferable to try to improve the efficiency of internal suppliers. This suggests that there is a need to develop a framework that will enable a decision to be made about what to outsource and what to insource. A model is applied to the IT sourcing decision.

An Auction Approach for Cost and Schedule Management of IT Outsourcing Project

2018 ◽  
Vol 35 (05) ◽  
pp. 1850034 ◽  
Author(s):  
Fuqiang Lu ◽  
Yanli Hu ◽  
Hualing Bi ◽  
Min Huang ◽  
Meng Zhao
Keyword(s):  
Information Technology ◽  
Utility Theory ◽  
It Outsourcing ◽  
Standard English ◽  
Management Process ◽  
English Auction ◽  
Numerical Examples ◽  
Schedule Management ◽  
Multi Attribute Utility Theory ◽  
The Cost

Cost and schedule management are important issues in an information technology outsourcing project. Generally, a client does not know much about market quotation and ability of vendors. Thus, an efficient approach should select a suitable vendor for the project with balanced cost and schedule. In this study, an improved standard English auction (ISEA) is designed, in which the multi-attribute situation is considered, and multi-attribute utility theory (MAUT) is introduced. A new auction protocol and a utility increment function are proposed, respectively. Finally, numerical examples are designed to demonstrate the auction process and its operation. Some insights are found: The ISEA is competent to describe the cost and schedule management process in an auction approach. The optimal incremental utility for client and vendor are found, and the proposed auction protocol is a mechanism for the client and vendor to obtain win–win results. The completely consistent results can be obtained from different size cases, which indicates that the validity of the designed auction mechanism and the effect of the utility increase function on the negotiation results.

Sourcing Markets

2006 ◽  
pp. 171-186
Author(s):  
Petter Gottschalk
Keyword(s):  
Information Technology ◽  
Cost Reduction ◽  
Business Models ◽  
It Outsourcing ◽  
Electronic Business ◽  
It Infrastructure ◽  
Technology Infrastructure ◽  
Information Technology Infrastructure ◽  
Outsourcing Contracts ◽  
Infrastructure Services

According to Gartner (2004b), IT infrastructure consolidation and standardization characterized the largest multibillion IT outsourcing contracts during 2003 and 2004 and are expected to continue for the next several years. These contracts are not just exercises in cost reduction necessitated by economic doldrums, but they are also intended to advance clients toward becoming enterprises that are more efficient. The foundation of an IT portfolio is the firm’s information technology infrastructure. This internal IT infrastructure is composed of four elements as was illustrated in Figure 2.3. The presentation of Weill and Vitale’s (2002) work on infrastructure services indicated the number and complexity of services that constitute the IT infrastructure in an organization to enable electronic business. Successfully implementing e-business initiatives depends on having the necessary IT infrastructure in place. E-business initiatives can be decomposed into their underlying atomic e-business models, which can have quite different IT infrastructure requirements.

Implementasi Analisis Proses Bisnis Sebagai Upaya Pengurangan Biaya

2019 ◽  
Vol 10 (1) ◽  
pp. 1-27
Author(s):  
Aniek Wijayanti
Keyword(s):  
Business Process ◽  
Cost Reduction ◽  
Process Analysis ◽  
Value Added ◽  
Added Value ◽  
Natural Material ◽  
Management Activity ◽  
Procurement Process ◽  
Material Procurement ◽  
The Cost

Business Process Analysis can be used to eliminate or reduce a waste cost caused by non value added activities that exist in a process. This research aims at evaluating activities carried out in the natural material procurement process in the PT XYZ, calculating the effectiveness of the process cycle, finding a way to improve the process management, and calculating the cost reduction that can achieved by activity management. A case study was the approach of this research. The researcher obtained research data throughout deep interviews with the staff who directly involved in the process, observation, and documentation of natural material procurement. The result of this study show that the effectiveness of the process cycle of natural material procurement in the factory reached as much as 87,1% for the sand material and 72% for the crushed stone. This indicates that the process still carry activities with no added value and still contain ineffective costs. Through the Business Process Mechanism, these non value added activities can be managed so that the process cycle becomes more efficient and cost effectiveness is achieved. The result of the effective cycle calculation after the management activities implementation is 100%. This means that the cost of natural material procurement process has become effective. The result of calculation of the estimated cost reduction as a result of management activity is as much as Rp249.026.635,90 per year.

ANALISIS PENGARUH BIAYA OPERASIONAL PADA PERUSAHAAN PENERBANGAN NASIONAL

2017 ◽  
Vol 1 (2) ◽  
pp. 81-107
Author(s):  
Dheny Biantara
Keyword(s):  
Value Chain ◽  
Cost Efficiency ◽  
Cost Reduction ◽  
Cost Leadership ◽  
Oil Pricing ◽  
The Cost ◽  
Operation Flexibility ◽  
Airline Maintenance

Summarized Indonesian airline executive views on the reason for the cost problem in mayor airline andon the potential areas and measures of cost reduction in airline operation. Present an introductionsurvey where 3 executives from 3 Indonesian airlines were respondent. In the executive opinion the costproblem in mayor Indonesian airline is primarily due to fuel and oil pricing and money currency. Of thevarious function in airline maintenance was seen as least cost efficiency, whereas flight operation wasseen as an area with most potential for cost reduction. Indonesian airline had made route and fleetchanges after the beginning of 2011 to reduce cost, concludes from the analisys result havingprivatization would be an important step towards more efficient airline operation. Flexibility fromIndonesian airline regulatory would be very much welcome and the value chain concept to improveIndonesian airline having competitive adventage and cost leadership differentiation.

Recent advances in the technologies of connection for panel structures: Design and cost analysis of different solutions with X-shaped dissipative connectors

2016 ◽  
Vol 20 (3) ◽  
pp. 299-315
Author(s):  
Massimo Latour
Keyword(s):  
Finite Element ◽  
Cost Reduction ◽  
Design Criterion ◽  
Classical Solutions ◽  
Finite Element Analyses ◽  
Seismic Damper ◽  
Classical Systems ◽  
Cyclic Behaviour ◽  
Energy Dissipation Capacity ◽  
The Cost

In this work, a recently patented seismic damper to be applied to structures composed by systems of panels is presented. In particular, the article is devoted to characterize the behaviour of the proposed connector by means of an experimental and numerical analysis and to provide some information about the cost of the elements needed to realize the damper, accounting for the manufacturing process. The experimental analysis has regarded five specimens tested under different loading conditions, and it has been used as a term of comparison with the classical systems of connection currently employed in these structures. Afterwards, in the article, a design criterion able to control the capacity and ductility of the device by simply varying the shape of the damper is presented and its accuracy is evaluated by performing finite element analyses. The results of the experimental and finite element analyses are very promising in terms of cyclic behaviour and energy dissipation capacity and reveal that the design of the element can be accurately controlled by means of the proposed approach. Furthermore, the cost estimate has revealed that the proposed damper is also cheaper than the classical solutions with a cost reduction of about 40%.

Reforming Teacher Pension Plans: The Case of Kansas, the 1st Teacher Cash Balance Plan

2021 ◽  
pp. 1-48
Author(s):  
Robert M. Costrell
Keyword(s):  
Cost Reduction ◽  
Pension Plans ◽  
Average Salary ◽  
Cash Balance ◽  
Surface Appearance ◽  
Risky Assets ◽  
Retirement Accounts ◽  
Employer Contribution ◽  
Loaded Structure ◽  
The Cost

Abstract The ongoing crisis in teacher pension funding has led states to consider various reforms in plan design, to replace the traditional benefit formulas, based on years of service and final average salary (FAS). One such design is a cash balance (CB) plan, long deployed in the private sector, and increasingly considered, but rarely yet adopted for teachers. Such plans are structured with individual 401(k)-type retirement accounts, but with guaranteed returns. In this paper I examine how the nation's first CB plan for teachers, in Kansas, has played out for system costs, and the level and distribution of individual benefits, compared to the FAS plan it replaced. My key findings are: (1) employer-funded benefits were modestly reduced, despite the surface appearance of more generous employer contribution matches; (2) more importantly, the cost of the pension guarantee, which is off-the-books under standard actuarial accounting, was reduced quite substantially. In addition, benefits are more equitably distributed between short termers and career teachers than under the back-loaded structure of benefits characteristic of FAS plans. The key to the plan's cost reduction is that the guaranteed return approximates a low-risk market return, considerably lower than the assumed return on risky assets.

scholarly journals Comparative economics of cashew nut kernel processing technology in Bastar region of India

2014 ◽  
Vol 39 (1) ◽  
pp. 165-172
Author(s):  
Praveen Kumar Verma ◽  
SK Nag ◽  
SK Patil
Keyword(s):  
Cost Reduction ◽  
Cost Benefit ◽  
Economic Viability ◽  
Working Capital ◽  
Cashew Nut ◽  
Net Profit ◽  
Cost Benefit Ratio ◽  
Comparative Economics ◽  
The Cost ◽  
Improved Technology

The paper has studied the economic viability of improved technology (Introduced under NAIP component-3) for extraction of cashew kernel from cashew nut in Bastar region of Chhattisgarh, India. Cost concept has been used to calculate economics of cashew kernel. The technology (Boiling, steaming, cutting, drying, and peeling) has been found viable over conventional practices (Traditional manual separation by stone or hammer) on account of higher recovery of 40 percent and cost reduction by 29.71 percent. Overall net profit per unit (One unit includes one boiler, one steamer, two cutter, one dryer, six peelers and cost of land, depreciation and interest on working capital) in the case of improved technology has been estimated to be Rs 7.32 lakh. Cost of production in machine extraction practices was 202.80 Rupees per kilogram of cashew in spite of traditionally practiced 288.56 Rupees per kilogram. The cost benefit ratio was found higher in machine extraction (1.57) as compare to traditionally practiced (0.169). The mechanical decortications and separation could not only save time and money, also reduced women drudgery (due to manual breaking by stone or hammer to separate kernel). The technology has been found suitable for promotion of entrepreneurship on the processing of cashew kernel from cashew nut in the production catchments which otherwise is not properly utilized. DOI: http://dx.doi.org/10.3329/bjar.v39i1.20166 Bangladesh J. Agril. Res. 39(1): 165-172, March 2014

scholarly journals Economic consequences to society of pandemic H1N1 influenza 2009 – preliminary results for Sweden

2009 ◽  
Vol 14 (37) ◽  
Author(s):  
L Brouwers ◽  
B Cakici ◽  
M Camitz ◽  
A Tegnell ◽  
M Boman
Keyword(s):  
Cost Reduction ◽  
Cost Effective ◽  
H1n1 Influenza ◽  
Economic Consequences ◽  
Pandemic H1n1 ◽  
Preliminary Results ◽  
Pandemic H1n1 Influenza ◽  
Swedish Society ◽  
The Cost ◽  
Death Cases

Experiments using a microsimulation platform show that vaccination against pandemic H1N1 influenza is highly cost-effective. Swedish society may reduce the costs of pandemic by about SEK 2.5 billion (approximately EUR 250 million) if at least 60 per cent of the population is vaccinated, even if costs related to death cases are excluded. The cost reduction primarily results from reduced absenteeism. These results are preliminary and based on comprehensive assumptions about the infectiousness and morbidity of the pandemic, which are uncertain in the current situation.

scholarly journals Economic Models of Higher Education: An International Perspective

2015 ◽  
Vol 2 (2) ◽  
Author(s):  
Pierre-Bruno Ruffini
Keyword(s):  
Higher Education ◽  
Cost Sharing ◽  
Economic Models ◽  
State Intervention ◽  
Developed Countries ◽  
International Perspective ◽  
Tuition Fees ◽  
Market Mechanisms ◽  
High Level ◽  
The Cost

As other sectors, higher education can be characterized by the combination of market mechanisms and state intervention in its funding and organization. Although higher education systems of developed countries pursue similar goals (provide high-level manpower, meet individual and social demands, etc.) and face similar challenges (massive expansion, internationalization, MOOCs, etc.) their economic models differ significantly. In some countries, universities are public and charge no or very low tuition fees, whereas in other countries, the cost-sharing with parents and students is much more demanding. The paper will try to underscore and explain these differences by drawing on the lessons of economic analysis and on the historical and cultural background of countries.

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