The True Cost of Outsourcing IT Departments (Research Paper Sample)

The True Cost of Outsourcing IT Departments
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The True Cost of Outsourcing IT Departments
Outsourcing IT departments has significant repercussions for businesses and the domestic economy. According to González et al. (2016, p. 223), the financial cost factor was the primary driver of outsourcing in the last decade of the twentieth century. Still, corporations were increasingly basing their decisions on a combination of variables. This shift in outsourcing decisions is influenced by the belief that outsourcing has hidden costs. The actual price of outsourcing IT departments includes the transition costs, loss of managerial control, loss of vital internal talents, and detrimental repercussions on the home country's economy.
Transition costs include selecting a vendor and transferring work to the chosen service provider. Defining requirements, sending out proposals and evaluating offers, and contract negotiation are all part of the vendor selection process. This component of the outsourcing cost accounts for around 0.5 percent to 2 percent of the total financial