Section 9 External and internal resources Using External

Section 9: External and internal resources Using External Services AQA ICT A 2 Level © Nelson Thornes 2009 1

Section 9: External and internal resources Why use external services? It is not always possible or economical for an organisation to provide all its ICT services internally. The required expertise may not be available and may not be needed all the time. Specialist equipment is expensive to buy and may not be used very often. AQA ICT A 2 Level © Nelson Thornes 2009 2

Section 9: External and internal resources Outsourcing involves using other organisations to provide certain services, for example: developing new software telemarketing manufacturing. Reasons vary a good deal, but outsourcing may: save costs resolve staffing issues improve quality. AQA ICT A 2 Level © Nelson Thornes 2009 3

Section 9: External and internal resources Offshore Services Sometimes organisations decide to outsource some part of their operations to another country. This may be because labour costs are cheaper or certain skills are easier to find abroad. Many organisations use offshore call centres and programming is a skill that is often cheaper abroad. The offshore work may be done by another organisation or within the existing one. There may also be disadvantages, largely due to language difficulties. AQA ICT A 2 Level © Nelson Thornes 2009 4

Section 9: External and internal resources Things to consider Is there a danger of being “held to ransom” by relying on external services too heavily? What happens if the external provider goes out of business? How do you decide whether a company is reliable enough to trust with all your sensitive data? AQA ICT A 2 Level © Nelson Thornes 2009 5

Section 9: External and internal resources Leasing Some organisations decide to lease equipment or software by paying a fee each year rather than buying it outright. This may be because: they do not have to fund such a large initial investment (though they will pay more overall) maintenance and upgrades are usually included as part of the contract the contact may include help and user support. AQA ICT A 2 Level © Nelson Thornes 2009 6

Section 9: External and internal resources Bulk Printing Organisations will always want to be able to produce some hard copy in house, but large quantities of printing are often contracted out to professional printers. Their professional equipment may: produce a better quality finish save time be cheaper to run reduce the need to buy expensive equipment offer extra services such as cropping and binding. AQA ICT A 2 Level © Nelson Thornes 2009 7

Section 9: External and internal resources Why use external services? A company may save money compared to employing staff. The arrangement can be flexible as the level of service can be controlled without hiring and firing. The expertise may not be easily available locally. A large pool of expertise can be made available when it is needed. AQA ICT A 2 Level © Nelson Thornes 2009 8