Strategic Outsourcing Essay Example | Topics and Well Written Essays - 3500 words

Strategic Outsourcing - Essay Example And this is still true today, the two main reasons for outsourcing attested to by a number of scholars   are 1. Improve Company focus, 2. Reduce and control operating costs (Mylot, 1995; Field, 1998; Greaver, 1999; Barthelemy, .2001). However, in recent times, organizations have become increasingly dissatisfied with their outsourcing contracts. An article from the MIT Sloan Management Review (1998) states that a survey by Cap Gemini Ernst & Young found that only 54% of companies are satisfied with their outsourcing, down from more than 80% a decade ago. The landscape of outsourcing has also changed dramatically in the last year with the increased popularity of SOA and raises questions such as 1. How will software vendors react to service-oriented architecture, real-time infrastructure and fusion? 2. How will enterprises achieve value on their investments in software? Similarly how the ESP are going to address to the questions such as 1. Transform their business models from highly c ustom one-to-one services to a one-to-many or many-to-many service model? 2. Effectively partner with ESP’s that are moving or have moved to a leveraged service model.Interestingly enough Gartner predicts that â€Å"by 2007, driven in part by SOA-based Web services, 18 percent of all IT professional services will be deployed in a multi enterprise, shared service environment. Enterprise application vendors are the likely beneficiaries of the SOA bounty when it comes to outsourcing. Vendors such as Oracle and PeopleSoft have grown.