Insourcing ( in - house development ) - is a common approach 
using the professional expertise within an organization to develop and 
maintain the organization's information technology systems.
Outsourcing - is an arrangement by which one organization 
provides a service or services for another organization that chooses not
 to perform them in-house.
 
Three different forms of outsourcing options a project must consider
- Onshore outsourcing - engaging another company within the same country for services.
 - Nearshore outsourcing - contracting an outsourcing arrangement with a company in a nearby country. Often this country will share a border with the native country.
 - Offshore outsourcing - using organizations from developing countries to write code and develop systems. In offshore outsourcing the country is geographically far away.
 
Influential drivers affecting the growth of outsourcing market
- core compentencies
 - financial savings
 - rapid growth
 - industry changes
 - the internet
 - globalization
 
- increased quality and efficiency
 - reduced operating expenses
 - outsourcing non-core processes
 - reduced exposure to risk
 - economies of scle, expertise, and best practices
 - access to advanced technologies
 - increased flexibility
 - avoid costly outlay of capital funds
 - reduces headcount and associated overhead expense
 - reduced time to market for products or services
 
Outsourcing Challenges  
- contract length
 
- difficulties in getting out of a contract
 - problems in foreseeing future needs
 - problems in reforming an internal IT department after the contract is finished
 - competitive edge
 - confidentiality
 - scope definition
 
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