How can information technology help a company to gain and maintain a strategic competitive advantage?

Information Technology (IT) is a critical part of the business process that can require technical competence beyond the scope of the current management. In this case, a third party should manage the IT function. Here are some of the reasons why outsourcing is a better choice for managing the IT department, rather than maintaining IT internally: IT costs become more visible as all billable hours must be accounted for Outsourced services are utilized as needed, and organizations pay only for what services are actually used An outsourced IT department can reduce costs by utilizing its extensive knowledge base of various IT specialists, as opposed to an organization maintaining a comprehensive in-house staff Outsourced companies make performance reports and measurements available to their clients Communications between business functions improve at all levels and ensure that IT resources are not being misused Outsourced companies can provide 24x7 support at a fraction of the cost Outsource staff tend to drive planning and budgeting improvements Service Level Agreements (SLAs) can be established Staffing levels can be adapted quickly to client requirements, thereby avoiding gaps due to attrition, business growth or economic downturns IT consultants are fully trained on the latest technologies Retention of technically qualified in-house personnel is more difficult when external job opportunities are rapidly changing Continuous IT support coverage without having to rely on only one or two key people Outsourced services use established standards for equipment and software requirements, saving time and money Outsourced services use approved lists of reliable vendors, which improves the quality of goods and services received Client management can concentrate on core competencies and revenue generating activities, while leaving technology management to IT professionals Management of non-essential core functions is transferred to the outsourcer