Proj410 Bpo Cloud Computing Case Study
BPO and Cloud Computing Case Study 1
PROJ 410 Contracts and Procurement
Purpose
Smith’s Information Services is in the process of implementing a corporate overhead reduction program. This is due in part to the increasing costs of operating and maintaining an in-house data center, as well as flattened sales and reduced profits. For these reasons Smith’s Information Services is looking to outsource the company’s data center to an outside vendor. The increasing overhead costs include personnel costs to operate and maintain the data center’s servers, data center cooling costs, and electrical utility costs required to run the data center. Reducing these overhead costs, by outsourcing the data center, will help Smith’s Information Services to maximize profits in the face of increased growth potential for the organization.
Current Situation
Currently Smith’s Information Systems operates and maintains an on-site data center for the collection and sales of consumer information. The data center must be operated and maintained 24/7 to stay relevant and competitive. As the company has grown since its inception, the data center has also grown forcing the company to hire more staff members to run the data center. These increased personnel costs, along with increased utilities costs, are beginning to cause the company’s overhead to skyrocket out of control.
Outsourcing/In-house
In-house services are becoming too expensive to maintain, so they are not being considered for retention in this cost analysis. There are three services being considered for outsourcing; a local data center, a well-known data center, and an overseas data center. Consideration of which option to pursue must include the following issues: * Data security (#1 concern) * Service Level Agreements * Human Resources Issues for both Local and Remote Staff Members * Notice to customers of the decision to outsource the data center
Cloud computing utilizes clusters of services that are not
PROJ 410 Contracts and Procurement
Purpose
Smith’s Information Services is in the process of implementing a corporate overhead reduction program. This is due in part to the increasing costs of operating and maintaining an in-house data center, as well as flattened sales and reduced profits. For these reasons Smith’s Information Services is looking to outsource the company’s data center to an outside vendor. The increasing overhead costs include personnel costs to operate and maintain the data center’s servers, data center cooling costs, and electrical utility costs required to run the data center. Reducing these overhead costs, by outsourcing the data center, will help Smith’s Information Services to maximize profits in the face of increased growth potential for the organization.
Current Situation
Currently Smith’s Information Systems operates and maintains an on-site data center for the collection and sales of consumer information. The data center must be operated and maintained 24/7 to stay relevant and competitive. As the company has grown since its inception, the data center has also grown forcing the company to hire more staff members to run the data center. These increased personnel costs, along with increased utilities costs, are beginning to cause the company’s overhead to skyrocket out of control.
Outsourcing/In-house
In-house services are becoming too expensive to maintain, so they are not being considered for retention in this cost analysis. There are three services being considered for outsourcing; a local data center, a well-known data center, and an overseas data center. Consideration of which option to pursue must include the following issues: * Data security (#1 concern) * Service Level Agreements * Human Resources Issues for both Local and Remote Staff Members * Notice to customers of the decision to outsource the data center
Cloud computing utilizes clusters of services that are not
References: Halvey, J. K., & Murphy Melby, B. (2007). Business process outsourcing: Process, strategies, and contracts (2nd ed.). Hoboken, NJ: John Wiley & Sons, Inc.