Summary 

New technologies and the availability of worldwide broadband networks have enabled organisations to compete on a playing field that is both level and global. Intellectual capital can now be delivered almost anywhere in the world, at any time. Virtual organisations have become a reality and have enabled the creation of powerful strategic advantages. With IT outsourcing opportunities - and in particular international outsourcing - has come the need to provide robust security for critical information. The continual monitoring of an organisation’s information security is a prime responsibility of its owners. This cannot be passed over to a third-party organisation.

As IT outsourcing environments become more complex and crucial to national daily life, governments have introduced new regulations to cover electronic records and signatures, as well as safeguards for ensuring the confidentiality and integrity of customer information. When selecting an outsourcing partner, there are a number of key factors to consider, including the provider’s capabilities and quality of service, pricing, security policies, financial strength and business stability, reputation, branding and references, regulatory and compliance history, and geographic location. There are a large number of possible variations associated with the levels and locality of IT outsourcing arrangements. However, whatever form is chosen, outsourcing has dramatically changed the nature of IT work and its impacts upon IT workers.

A Service Level Agreement (SLA) forms a central element associated with the ongoing management of outsourcing engagements. A well-designed SLA correctly defines expectations for both the client and supplier. Similarly, a SLA provides guidelines for accurately measuring anticipated performance objectives. In addition, the ongoing review of the SLA from year to year and the thinking behind it, are important factors.  A review of the SLA should involve both:

• Strategic analysis: Questioning whether IT outsourcing arrangements remain valid, and
• Tactical analysis: Envisaging an ideal IT outsourcing arrangement for the organisation, and how this might develop over a given renewal term.

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