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Some Disadvantages of Outsourcing.

13 Mar

In my last post I discussed some of the advantages of outsourcing but it may not always be the best option for a company.

Here I will discuss some of the main disadvantages of outsourcing.

1.  Loss of managerial control:  While outsourcing can be a solution to many managerial headaches, it can also be the cause of some.  If you agree to outsource some of your operations to another company then you effectively put them in charge of that task for the duration of the contract.  Of course a lot of specialists in outsourcing companies will be open to suggestion in order to keep their customer (you) happy but you may not always be fully aware of what they’re doing until it’s too late.

2.  Hidden costs:  We all know that outsourcing is used as a way to minimize costs.  Outsourcing companies know this too and so they will compete with each other on price.  In order to do this they may subtly imply a certain package without actually stating the specifics.  You may later find that you’ve paid for a lot less than you had originally thought you were going to get.  They may start billing you for “additional charges” which you had assumed would be fairly standard and already covered in the agreed contract.  If you choose to fight them legally on this you may find that they have sewn up every loose thread and that you are now cornered.  They are in the business of doing this and so they invest huge efforts into ensuring an airtight procedure.  Unfortunately your legal costs won’t pay themselves either.

3.  Threat to security and confidentiality:  While your business may follow strict policy with regard to confidential information there is nothing that guarantees your outsourcing company will adhere to the same standards.  If they are granted access to personal information of staff, business plans or product ideas it should first be ensured that your contract with them has penalty clauses to restrict the misuse of such information.

4.  Quality problems:  Although expected, they might not use the best tools for the job or necessarily go about things in the best way.  They’re only obligated to fulfill the contract agreed and so they may cut corners in  order to reduce their own expenses and therefore increase their profit levels.

5.  Tied to the financial well-being of another company:  You are now relying on this other company to take care of some task for you.  Should they experience financial difficulties which result in them going out of business you may be left in the lurch!

6.  Bad publicity and ill-will:  Some workers feel very threatened by the thought of jobs being outsourced.  Should they see job losses in one department due to outsourcing they may feel threatened and the morale among workers in your firm may fall.  As well as this, should the outsourcing company you’ve used receive bad publicity in the media and it is widely-known that they supply to you then the reputation of your company could be jeopardised.

7.  Time wasted in securing satisfactory outsourcing:  Lengthy bid-processes along with negotiations can be very time-consuming.

8.Lack of strategic alignment:  As mentioned earlier, the interests the outsourcing company and your firm could be very different.  If these interests are too far-removed then outsourcing simply is not the best fit for your organisation.  Look within your organisation.  These people will have a vested interest in the success of your business and will more than likely be willing to work harder to achieve such successes.  Most analysts recommend that firms do not outsource any key functions which directly affect the products or services produced by the company.

 

 

Sources:

http://www.referenceforbusiness.com/small/Op-Qu/Outsourcing.html

http://operationstech.about.com/od/outsourcing/tp/OutSrcDisadv.htm

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Outsourcing? What’s so good about it?

13 Mar

Outsourcing.  It’s a massive opportunity which almost all businesses, particularly medium to large scale businesses, must consider.  But what exactly is it?  The concept of outsourcing can be applied to pretty much all aspects of a firm’s operations.   Essentially it involves paying someone from outside of your organisation to handle a certain operation in which they are usually an expert.  It can often save a firm time, money and an awful lot of stress!
And of course outsourcing occurs in the field of IT with up to 60% of all businesses outsourcing their IT to an IT specialist.

Outsourcing can prove a great way to reduce costs.  You don’t have to hire staff to carry out these tasks so there’s no salaries to be paid, no salary-related taxes, no costs of training new staff, no need to purchase certain hardware and/or software and you don’t need to provide extra work-space.  Not to mention the savings that can be made on insurance!

Some Reasons for Outsourcing

By outsourcing to a quality IT provider you can also reap the benefits of top-level expertise without having to incur some of the expenses mentioned earlier.  With technology changing and improving so rapidly these days it can happen that the new piece of technology you bought last week for your company will be out of date in six months time!  If you outsource then the onus is on the supplier to ensure that they have the latest technology available to them or else they will lose your custom.

Another advantage of outsourcing in this area of expertise is that the organisation to which you outsource will undoubtedly have dealt with tonnes of similar problems with other companies in the past and will be able to recognise a problem and come up with the solution quickly and efficiently.

To sum up, firms who take advantage of outsourcing from a reliable supplier can save costs, ensure the highest level of service, increase efficiency and most of all keep up with or even get ahead of the competition!
It can also offer some managers better sleep.

Outsourcing_tcm18-35208

Sources:

http://www.referenceforbusiness.com/small/Op-Qu/Outsourcing.html

http://www.intrice.com/advantages-of-offshore-outsourcing.html

What’s the V-model all about?

10 Mar

The V-model is another form of traditional SDLC.  The V stands for Verification and Calidation model.  It is similar to the waterfall model in that it follows a sequential path as shown if Fig 1.9.  As well as that, no phase is intitiated until the previous phase has been completed.  Testing of each stage occurs in parrallel as can be seen also in Fig 1.9.

Fig 1.9

Fig 1.9

In the model shown above there are 5 main stages.  They are as follows:

Requirements stage:  here both BRS and SRS take place in order to take into consideration the needs of the intended users of the system once it has been completed.

High level design stage:   at this stage the system architecture is designed and an integrating plan is also created to how well or otherwise the various components of the system work in unison.

Low level design stage:  here the reason for each part of the system is made clear along with creating viable component tests.

Implementation stage:  similar to the waterfall model, this is where the coding occurs.

At the final stage the developers convert the module design into code.

Testing occurs in parallel to all stages of the process bar the last.

Advantages of V-model:

  • Simplistic in use.
  • Testing occurs in parallel to each stage.
  • Problems can be detected early and stopped.

Disadvantages of V-model:

  • It is a rigid model and unaccommodating to change.
  • There are no prototypes produced early on in the system.
  • Documents are produced at the start which means if changes are made then the documentation should be adjusted accordingly.

The v-model is best suited to small or medium sized projects with clearly defined requirements.

It is however regarded as a risky enough model.

Sources: http://istqbexamcertification.com/what-is-v-model-advantages-disadvantages-and-when-to-use-it/#.UTzCMdYqxy0

 

From Traditional to Agile

6 Mar

In my last two posts I discussed some of the faults associated with both the spiral and waterfall models.  These are traditional forms of systems development.  It was these flaws which brought about the need for change, and so Agile Software Development was born!

To summarize, some of the major complaints of traditional methods are generally to do with discrepancies between what the user actually wanted and what was produced as well as issues with lengthy documentation.  The Agile method overcomes these obstacles.  It is a more flexible process so if a desired product was not correctly described initially, it can be changed at any time.  There is also far less emphasis on documentation and documentation certainly doesn’t hold up progress like in traditional models.

Some further differences are shown below:

The Agile model was also developed to cut down on production times which for traditional models were often quite long and very often yielded poor results.  This could lead to major financial losses for some companies not to mention wasted resources.   The Agile model’s adaptability is another way in which it saves frustration.  A new value was placed on people rather than processes, flexibility over prior agreement and functional results over planned courses of action.  These were detailed in the Manifesto written up and signed by Kent Beck, Mike Beedle, Arie van Bennekum, Alistair Cockburn, Ward Cunningham, Martin Fowler, James Grenning, Jim Highsmith, Andrew Hunt, Ron Jeffries, Jon Kern, Brian Marick, Robert C. Martin, Steve Mellor, Ken Schwaber, Jeff Sutherland and Dave Thomas.

“Manifesto for Agile Software Development

We are uncovering better ways of developing
software by doing it and helping others do it.
Through this work we have come to value:

Individuals and interactions over processes and tools
Working software over comprehensive documentation
Customer collaboration over contract negotiation
Responding to change over following a plan

That is, while there is value in the items on
the right, we value the items on the left more.”

All in all the Agile system is a far more accommodating and effective method of developing an information system.

Sources:

http://manifesto.agilealliance.org/

http://crackmba.com/traditional-methodology-versus-agile-methodology/

cathaldoyle.com

http://www.dotnetfunda.com/interview/exclusive/x1170-can-you-point-out-simple-differences-between-agile-and-traditional-sdlc.aspx

Does anybody want a load of free drink?

25 Feb

Now that I’ve got your attention……  This has nothing to do with free drink.  It’s about the pros and cons of the spiral model.  Sorry to disappoint.  Anyway, for those of you that continue to read this, the spiral model of systems development is a traditional method.  It can be divided into four main steps which reoccur in a continuous spiral-like manner as illustrated below:

Visual representation of how the spiral method operates.

Visual representation of how the spiral method operates.

These steps or phases are Planning, Risk Analysis, Engineering and Evaluation.  In the initial phase, planning, the objectives the system is expected to achieve are defined along with alternatives and their constraints.

The second phase, risk analysis, refers to the appraisal of alternatives with regard to the aims and restrictions involved as well as calculating the risks entailed in each.  A risk resolution is drawn up also.

In the engineering phase the system is essentially developed and verified before moving onto the evaluation phase.

Evaluation deals with planning the next phase which is vital to the spiral model as it is a continuous system.  This stage allows systems analysts to assess the system to date and see if the requirements of the end users could be satisfied better.

The spiral model is lauded by many for the advantages it provides.  It often highlights precarious risks early on which can result in serious cost saving for a firm.  After all, the majority of failed information systems end up exceeding their original expected budget.  This allows firms to terminate a project and keep it from draining further resources.

Another advantage is that users are given access to prototypes early which again prevents some issues from going undetected for long periods of time and also helps to ensure that the system meets the desired requirements.

Regular input from the start allows systems analysts to supply a system which operates adequately.  It is advantageous too that the users are so integral to the development of the system.

This being said, the model does have its flaws.  As the diagram above shows, the model is complex and intricate can sometimes cause much confusion in its development.  Not only that but a considerable degree of proficiency may be needed to carry out risk assessment.

The time taken to assess risks, decide upon objectives, alter objectives if necessary and create a prototype can often be unwarranted, especially for small-scale operations.

Additional problems have been known to occur in relation to the actual delineation of objectives and it may be difficult to determine measurable milestones.

Finally, the nature of the spiral model means that it could theoretically go on forever as it has no explicit end-point.

All in all, the spiral model offers a very up-to-date product with several early indicators to help avoid unnecessary use of resources however it does have its failings when it comes to clarity and time consumption.

Thanks for reading if you stuck it out.

Sources: http://www.cathaldoyle.com

Yeas and neighs of the waterfall model.

18 Feb

The Waterfall model is a widely used method of systems development.  It consists of six major phases which occur in accordance with the sequence shown below:
Picture1

The first step is planning.  This is key as it defines the objectives of the project via the formation of a Baseline Project Plan (BPP) and aProject Scope Statement (PSS).  The planning phase also lays out the activities to be undertaken in order to produce the system as intended.  The waterfall model does not allow for regression so if an error occurs it must either be accepted or the project be abandoned.

The analysis stage involves evaluating the current system and taking into account the requirements of the users to ensure that the system developed will be an improvement on the existing system.

The design phase is essential in establishing how exactly the new system will operate.  It can be split into two sub-divisions as shown above.  Logical design deals with the way in which the data is to flow whilst the physical design is concerned with how the data is inputted, processed, stored and outputted.

Implementation finally produces a working system through different methods of coding, testing and installation.  In order for users to operate the system correctly, training must take place.  Documentation is an important task at this stage also and can be quite time consuming.  It is for this reason that it is sometimes overlooked.

The final step is maintenance and this must take place on a regular basis in order for the system to continually provide a service of a certain standard.

Some of the major advantages of the waterfall model would be it’s simplicity.  It’s linear structure makes it easy to follow and ensures that all prerequisites are taken prior to advancement.  It works well with well-defined projects.  The system is quite manageable and testing takes place at each stage.

There are however some disadvantages also.  If the scope of a project is incorrectly decided upon it may become near-impossible to amend.  As well as this, there is no usable software produced until very late in the process which means that a lot of time, effort and money must go in before one even knows if the result is worth the expenditure.  It is for this reason also that the system is believed to be quite precarious.

Sources used: cathaldoyle.com

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