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I’m working on a information economics project and need an explanation to help me study.

Hello ,,I am working a report for information system outsourcing.I want to help you write:Recommendations (150 words), in bullet pointsConclusion (150 words)


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Outsourcing has become a good way for the big companies at first and then the SMEs to
implement it for many reasons like the reduction on the cost assigned for that specific task
or also having a good thing which is assigning some secondary tasks or operations for these
outsourcing companies. Moreover, the governments also nowadays doing this great step
and have implemented the outsourcing in their operations and some of it’s tasks and in this
report we will focus on one of the ministries in Oman which is the Ministry of Transport,
Communications and Information Technology and this ministry had supervised many
national projects like, the airports and ports which connect Oman with the world and share
in diversifying the sources of income and beside that obtaining the sustainable development
in fields like, industrial, economic, tourism, industrial, and other fields (ABOUT THE
MINISTRY. (n.d.)). However, the IT industry have become one of the major sectors in the
outsourcing and it came the 1 on the active area in outsource by a 28% (Advantages to
Outsourcing You Might Not Have Thought Of, 2021) which is quite good number and for
that the purpose of this report is to study the Ministry of Transport, Communications and
Information Technology and how does it implement the outsourcing in its operations. In
addition, this report will go through this ministry and discover how the ministry implements
outsourcing. The structure of this report is as follows, literature review, research
methodology, research findings and discussion, and recommendations.
4. Literature review:
4.1 What Is Outsourcing?
Outsourcing is simply defined as, when a company hires an external party to create goods and
preform services that were originally made in-house by company’s staff and employees. This
step is usually taken when companies decide to cut down costs as a measure for cost-reduction.
It affects a broader range of positions such as customer service, IS services, manufacturing,
and the back office. The beginning of outsourcing was first noticed in 1989 as a business
strategy and continued to be an essential part in 1990s of business economics. It encouraged
companies as well as businesses to focus on core business objectives through allocating
valuable resources where they are most effective. Organizations may choose wither to
outsource IS service On-shore, nearshore, or offshore to a more distant country. Both offshore
and nearshore outsourcing are usually pursued by companies to save money.
4.2 Opportunities:
Outsourcing is known as a development tool for most countries, including transitioning
economies. Since its existence it has brought big benefits to businesses. The most basic reason
that motivates companies globally to embrace outsourcing is cost reduction. It is an effective
service to reduce unnecessary costs. This objective can be achieved through a variety of means
such as shifting fixed costs into variable costs, as well as shrinking nonessential infrastructure.
Another reason is that companies can focus on their augmented strategies by outsourcing noncritical activities. This step provides businesses some freedom by giving enough opportunities
to comprehend the mechanics of innovation, compete in the market, and constantly upgrading
their services. In addition, companies outsource a specific process to ensure the access to highly
developed technologies and knowledgeable expertise. Vendors compete usually in this area to
enhance their reputation and attract more clients for outsourcing services.
4.3 Challenges:
On the other hand, Outsourcing does have some challenges. A non-transparent contract could
eventually be an impediment for future disagreements. The contract must be structured after
negotiating the future requirements of the service provider and the outsourcer to prevent any
future misunderstandings. Moreover, political issues such as instability, changing employment
laws, inflation, and tax laws could be a headache for both client and vendor and would increase
the hesitation to one’s choice of outsourcing. Furthermore, conflict of interest and privacy
issues are a major threat in the security of outsourcing. Clients develop a limited amount of
trust to outsource confidential and sensitive data to outsourcing vendors. Monitoring systems
must be implemented to prevent any type of infringement. Last but not least, communication
and language barriers can set of projects too far off their destination, especially when
companies decide to go for nearshoring or offshoring. Assumptions could be made that some
parts of the service offered are on the company’s end and here where the issues start to arise.
4.4 Critical Success Factors:
There are a number of dependencies and factors that are significant to the success of managing
and implementing outsourcing operations. Proper planning of applying those dependencies will
enable companies to be triumphant in its outsourcing ventures. The process begins with
analyzing the operation and creating a development plan that matches the organization’s needs
with a continues monitoring and evaluation. The first step in achieving a successful outsourcing
service is that goals and objectives must be clear on the client side. With the use of
stakeholder’s participation, companies should know their motives and priorities and rank their
criteria. Companies should understand that outsourcing does not only affect processes, but it
can also influence livelihood of many employees. Another reason is that companies should
know their strengths and weaknesses. Most organizations make the mistake of waiting for the
vendor to discover the disorganized IT asset base or preform due diligence thus, it creates
internal conflicts and starting an unstable relationship. To add to that, vendors advise client
companies to not only look at the cost-cutting side. Looking at IT outsourcing market
prediction paper for 2009, Gartner company mentioned that “inflexibility caused by an
excessive cost reduction focus results in business disruption in 30% of outsourcing deals.”
Companies that outsource IT functions such as desktop support and help desk enables IS staff
and higher management to focus on competitive differentiation. Contracting with outsourcing
vendors will give customers access to tools, disciplines, expertise, and methodologies that they
couldn’t have got otherwise.
5. Research Methodology
Data Collection
We adapted previously validated interview questions that are used in other articles that
prove its reliable and valid. The interview questions for the study have been modified to fit
the aims and context of the study. The interviewees will be asked question on topics below:
1. How to determine what to outsource and what not
2. What are the strategic motives for IS outsourcing decisions?
3. What are the key motives for organization to outsource IS?
4. What are the main IS functions organization outsource?
5. IS outsourcing Delivery Model
6. IS Outsourcing Challenges/ Risks
7. IS Outsourcing Critical Success Factors (CSF)
8. Knowledge Transfer
9. Top Management Commitment and Support
The interview guide and interview transcript are provided at Appendix 1
1. Sample
We’ve collected data from a group of IT department employees in Ministry of
Transport, Communication and Information Technology (MTCIT). The group of interviewees
have different rules in the MTCIT IT department to ensure that the data we collected are
comprehensive and cover all the needed aspects related to information systems outsourcing
Data Analysis (Thematic Analysis)
1 – Q1
Job title
Muhannad Al Shukri
• Job title: IT support
• Qualification: Bachelor’s in
information technology
• # of years of work
experience: 2 years
Badar Al Sayegh
• Job title: Networking
• Qualification: Bachelor’s in
network engineering
• # of years of work
experience: 3 years
1 – Q2
– Two subdepartments
– 23 staff members
1 – Q3
– 24/7 support
– Help desk & data
center outsourced
1 – Q4
– Cost cutting
– HQ services
1 – Q5
IS Outsourcing
Motivations /
1 – Q6
IS Functions
– Core business
– Cost cutting
– Flexibility
– Physical services
– Cloud services
Muhannad Al Shukri: The IT
department is placed in the Ministry
of Transport, Communication and
information Technology, The IT staff
are around 23 who are divided
between the data canter department
and the IT support department.
Badar: An important factor is to see
if we need a 24/7 hours support for a
service. Most of the services that
needs 24/7 hours support and
monitor like the data canter will be
outsourced. Another thing is to see if
the Ministry has the needed skills to
do the needed task. In case the
Ministry does not have the needed
capabilities, the IT function will be
Muhannad: The two main strategic
intents are cost reduction and having
a high-quality services.
Muhannad & Badar:
• Cost Reduction
• Focus on Core Business
• Flexibility / Rapid delivery
Muhannad & Badar:
• Software development and
• Data communications

1 – Q7.1
1 – Q7.2
IS outsourcing
1 – Q8
IS Outsourcing Good relationship
1 – Q9
1 – Q10
1 – Q11
– Global expertise
– High-end
Highly credible
IS Outsourcing Better results in long
Factors (CSF)
– Similar culture =
– Qualified skills
Help Desk and Support
Internet services / web
Systems Security and controls
& management
Nearshoring is the model used by the
Muhannad: To get access to global
expertise and take advantage of highend technologies.
Badar: It is also cheaper and can be
more efficient than the other two
models. But it can be costly and can
be complex to monitor in some cases.
Muhannad: No, we did not face any
of these challenges. The reason is
that we are maintaining a good
relationship with our vendors and
trying to solve any problems
immediately in the beginning.
Badar: The risks can be mitigated by
ensuring that the Ministry is
contracting with highly credible
vendors who can deliver their
promises. Also, the risks can be
mitigated by maintaining good
relationships with the vendors by
having periodic meeting to discuss
the latest updates.
Badar: Yes planning is very
important in any outsourcing project,
the right planning well help in
achieving better results in the long
term and will ensure the Ministry is
going in the right direction.
Muhannad: Vendor selection is one
of the most important factors that can
affect the success of any outsourcing
project. Working with people who
have a similar culture will make the
communication process much easier
for us. It is also important for us to
be sure that the people who are
working in the vendor having the
right skills and qualifications to work
with us. In term of the processes, we
need to ensure that the vendor can
run the projects smoothly and being
flexible if any changes are needed to
be done. We are not focusing a lot on
the company size and culture as long
they are doing their job in a
professional way. About the
technology, of course the vendor
should be knowledgeable of the
needed technologies and are able to
provide the high-end technologies
that can increase the efficiency in the
1 – Q12
– Set the ground for
– Written precisely
and comprehensively
– fair
1 – Q13
– Good relationships
– Good experience &
Avoid problems
1 – Q14
– Ensure needed
information exist
1 – Q15
– Difficult to monitor
and execute
1 – Q16
Badar Also agreed with what
Muhannad said
Badar: This is the most important
factor that set the ground for
everything else. It should be written
precisely and comprehensively and
should be fair for both parties.
Muhannad: Also agreed with what
badar said.
Badar: Having good relationships
with our vendors is very important
because this lead to have a good
experience with the vendor and avoid
any problems that can occur because
of the weak communication and the
lack of trust.
Muhannad: Knowledge transfer to
the vendor is important to ensure that
the vendor is having the needed
information to work in the
outsourced services.
Muhannad: Of course, because
without their support the outsourced
processes and services will be
difficult to monitor and execute in
the right way.
After a discussion between
Muhannad and Badar they ranked the
success factors as follow:
2.Outsourcing Planning
3.Vendor Selection
5.Top Management Commitment and
6.Knowledge Transfer
6. Research Finding and discussion
Following the interview that we had with Mr. Muhammad Al Shukri and Mr. Bader Al
Sayegh from the Ministry of Technology and Communications Department of Information
Technology, where Muhammad said in a brief introduction about the Information Systems
Department that it is a department located in the Ministry’s headquarters by the self and
consists of 23 employees divided between the data center department and the support section
Information Technology. Then we asked them about how to determine the tasks that must be
performed internally in the company and between outsourcing, so they answered that the
main element in determining whether they needed to be outsourced or completing the internal
task is whether this service requires support around the clock or not? If it requires support,
then they do it using outsourcing, and if it is not, then they achieve it internally. In addition to
that, they see whether the Ministry’s employees possess the required skills or not, and if they
possess them then they do not need to seek assistance from the outside and vice versa. As for
the question of what the strategic goal behind the decision is to outsource, the answer was
two goals, which are to reduce costs with high-quality services. We conclude that the
ministry reduces costs while not ignoring the high quality. Their answer came to a question
on what are the motives that make them outsource as to reduce costs, to share risks and to
focus on the core of the work also to the presence of flexibility and to deliver work in record
time. Then we asked them about the most important IT functions that they outsource, and
their answer was: software development and maintenance, data communications network,
help desk, and support operations, Internet services/web hosting and systems security and
controls & management. The IS outsourcing Delivery Model that the ministry follows is
nearshoring and we ask them why? their answer was to get access to global expertise and
take advantage of high-end technologies and It is also cheaper and can be more efficient than
the other two models. But it can be costly and can be complex to monitor in some cases. In
addition, we asked them if they face any risks or challenges and they said that they did not
face any challenges because they are maintaining a good relationship with their vendors and
trying to solve any problems immediately in the beginning. We asked them about how they
mitigate IS outsourcing risks and the answer was That the risks will be reduced by ensuring
that the Ministry contracts with highly reputable vendors who can follow up with their
commitments. Additionally, the risks can be mitigated by maintaining good relationships
with the vendors by having periodic meetings to discuss the latest updates.
In the last section in the interview, we asked them about the IS critical success factors (CSF).
Firstly, wither IS outsourcing planning is important or not and they replied that planning is
critical in any outsourcing project; proper planning will aid in delivering better long-term
outcomes and will ensure that the Ministry is on the right track. Secondly, we asked them a
very important question which is how important is vendor selection? Choosing the right
vendor that has the right mixture of competencies? and they answered that One of the most
critical considerations that can influence the performance of any outsourcing project is
vendor quality. Working with people who share our cultural values would make contact a lot
simpler for us. They have also mentioned that it is important for us to ensure that the vendor’s
employees have the necessary expertise and credentials to work for us. In terms of the
processes, they need to make sure that the provider can run the projects seamlessly and is
adaptable if any improvements are required. They are not focusing a lot on the company’s
size and culture if they perform their duties professionally. In terms of technology, the vendor
should, of course, be familiar with the required technologies and be able to deliver high-end
technologies that can improve process performance. Bader indicated in his answer to the
question of how important it is for the contract between the parties to be clear and have
clauses that serve both parties that this is the most crucial element since it lays the foundation
for both parties. It should be written clearly and fully, and it should be equitable to all sides.
Regarding the importance of relationships in building trust and communication, Bader replied
that having positive relationships with our vendors is critical because it allows us to have a
positive experience with them and eliminate any issues that might arise due to a lack of
contact or confidence. Furthermore, about the importance of transferring knowledge to the
vendor and about the importance of obtaining support from managers, Muhammad said
Knowledge transfer to vendors is critical to ensuring that they have the expertise they need to
perform the outsourced services, and without the managers support, it would be impossible to
properly track and implement outsourced systems and resources. Finally, we asked them if
they could rank the Outsourcing Critical Success Factors from the most critical to least
critical. Their answers were as follows the first-place contract then outsourcing planning then
vendor selection relationship then top management commitment and support finally in the
sixth place Knowledge Transfer.
Compering with what we have found in the literature review we can say that the ministry has
followed a good example of dealing with the nearshore vendor for outsourcing services. They
have chosen this delivery model because it provides high quality services, less cost and they
can focus on their core business objectives. However, there was a conflict with our literature
review that some cases for outsourcing the ministry’s IT functions will cost more than the
usual. According to what we found in the literature review regarding the it functions to be
outsourced the ministry have followed similar steps such as help desk, and support
finally, we can conclude that the literature review findings do match the points mentioned in
the interview greatly.

The interview transcript can be found in the appendix 1
Interviewee Background
Q1. Talk about yourself and your position?
Muhannad Al Shukri

Job title: IT support

Qualification: Bachelor’s in information technology

# of years of work experience: 2 years
Badar Al Sayegh

Job title: Networking engineer

Qualification: Bachelor’s in network engineering

# of years of work experience: 3 years
Organization Background
Q2. Talk about the IT department in the ministry? (structure / number of staff/ budgets
Muhannad Al Shukri: The IT department is placed in the Ministry of Transport,
Communication and information Technology, …
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ashford university


Ministry of transport

Information system outsourcing

Information Technology

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