Types of outsourcing

The megadeal, or "Keys to the kingdom"
An organisation passes all hardware, software and staff to an FM company; they provide the service previously provided in-house. Only a few IS employees remain to manage the FM contract
Strategic partnership
A marketing term for outsourcing the major systems, while retaining control of minor systems (e.g. stand-alone PCs)

"When suppliers talk about partnership, I know they intend to rip me off. When suppliers talk about strategic partnerships, I know they intend to rip me off for a long time" (Robson, 1997)
Each system is outsourced separately, normally as part of a programme of competitive tenders

Question: What are the pros and cons of each?
(Move your mouse pointer over each icon for a suggestion)

Benefits                                 Problems                                
Mega deal Only one contract to manage
A dispute with FM company leaves nothing working
Strategic partnership Simpler contract(s)
Still require in-house experts
Piecemeal Rolling programme of renewals
Risk spread
Many contracts. Buck passing

UpOther topics Comments please to: dwfarthi@glam.ac.uk © 1999, University of Glamorgan