ICT Outsourcing Definitions and Types

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ICT outsourcing is one of the current trends for companies around the world to do their business processes, and is estimated to have started in the early 1990s.

Since that year, Kodak have been using external partner to handle its ICT resources, and as they lack expertise in ICT, they hire another company to partner with them on handling ICT resources.

This is because companies will rather focus on their core business functions, and pay a lesser attention to subsidiary. About 20 years later, outsourcing turned out to be a need in so many companies, especially at customer support and back-office processes.

Definition

Outsourcing is a concept of contracting out part of the organization’s business process to a third party that will provide the specific skills and services needed by the organization. This is so that the outcome of the outsourcing is just as expected.

Following these two definitions, here are some common points to note:

A company transferring one or many business process to a third party

A third party has the skills and services needed for the business process

Has an agreement or contract between the two parties on the price and expected outcome

Types

Outsourcing is divided into two:

Total outsourcing

Selective outsourcing

The total outsourcing is where the IT budget is used to pay external vendors, and is approximately 80% or more than the total.

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