The Risks of Outsourcing IT

Question: Discuss about the Risks of Outsourcing IT. Answer: Forum Discussion Cloud Computing In the modern troubled economy, cloud computing offers a solution to meeting the on-demand resource requirements where an organisation is able to lease services that would otherwise be unaffordable. Furthermore, this innovation offers viable alternatives to traditional IT infrastructure requirements which improves system performance and efficiency. However, as compelling as it is cloud computing does pose some substantial risk, for one data security is a heavy risk that an organisation has to contend with. Data security is a big issue because the boundaries of operation are unclear in cloud computing and so is the separation of data. In addition to this, cloud computing increases network exposure and the applications themselves (Prakash, 2011). However, like any other technological problems, there are measures that can be implemented to manage these problems that may risk the functionality of cloud services. Self-assessment is an integral step in enhancing risk management as it helps identify an organisations data and is later used to protect it. Finally, the security concerns are fully mitigated by an end to end security system. E-commerce When e-commerce was introduced to the market it created a new avenue for retailers to conduct business. In essence, it created a new market environment that was more dynamic and versatile as compared to the physical world/environment. This virtual market had improved flexibility and convenience where shoppers would conduct business from anywhere in the world at any given time. However, its strengths could also be used to target user in order to acquire sensitive information from them. Most online transactions occur between parties unknown to each other and away from the physical eye, this possibility increases the risk of the people involved as some can take advantage to solicit information from unwary targets (Visa Asia-Pacific, 2000). Considers the cases of identity theft where peoples confidential information is used illegally to transact business after been obtained through illegal means such as malware infections executed in the form of phishing, or even spoofing. These risks present a viable risk to online business a factor that creates the necessity for risk management. On top of the security protocols that safeguard peoples confidential data, an organisation can educate its employees on the basic precautionary measures to protect online data. Furthermore, these precautions can then be adopted at an individual level. Outsourcing IT infrastructure in an organisation Outsourcing IT services is an efficient way for an organisation to minimise operational cost while maintaining a high standard of service requirements. For instance, an organisation will outsource the development of its systems (Softwares) to another organisation by buying a fully packaged software. This purchase eliminates some risks on behalf of the organisations whose need is a final and operational system (Earl, 1996). However, like in any other form of business, there is risk involved in this endeavour. While it may cut on operation costs and increase the access to specialised resources, it can produce an unnecessary outcome to IT infrastructure. For instance, it can increase the operation value if the services received fail to meet the set standards. Moreover, it can reduce the overall service delivery by diminishing the level of expertise within an organisation. As a solution, an organisation can limit IT outsourcing requirements to heavy infrastructure that prove costly to develop within the organisation. Moreover, it can establish a renewable policy that utilises fresh expertise in each outsourced task it considers. Such regulations can mitigate the risks involved in business and in the IT infrastructure. References Earl. M. J. (1996). The Risks of Outsourcing IT. MIT Sloan Management Review. Retrieved 25 January, 2017, from: https://sloanreview.mit.edu/article/the-risks-of-outsourcing-it/ Prakash. S. (2011). Risk Management in Cloud Computing. CIO from idg. Retrieved 25 January, 2017, from: https://www.cio.com/article/2409109/cloud-computing/risk-management-in-cloud-computing.html Visa Asia-Pacific. (2000). Electronic Commerce Risk Management, Merchant best practice. Risk administration. Retrieved 25 January, 2017, from: https://www.stgeorge.com.au/content/dam/stg/downloads/Merchant_%20ecommerce_merchant.pdf