Outsourcing Projects: Gaining Local & International Competitive Advantages - Essay Sample

Introduction

In the modern world, a majority of the information technology (IT) and information systems (IS) companies and IT departments, are outsourcing projects overseas to achieve competitive advantages locally and internationally. Outsourcing is an undertaking in which a company engages another organization or a person to deliver services, perform tasks, and handle operations that are generally done or initially done within the company. Endothon is headquartered in Georgia and has interests and rich history in wine, agricultural production, and business entrepreneurialism and has a total of 4,600 employees. The company has recently opened a branch overseas. The management has indicated that they want a new enterprise resource planning (ERP) system that is compatible with its customers' networks. As such, the company's management has set a few conditions that should be met by the company before they can engage the organization and implement it within the next ten months.

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Endothon’s Outsourcing Needs and Expectations

Endothon Inc. requires a system that is compatible with their clientele systems. This is because currently, a majority of their customers already have Systems Applications and Products in data processing (SAP), which provides their ERP system. The next requirement is the implementation or configuration duration, which has to be with the ten months. They also have a budgetary limit of $10,000,000. A successfully implemented project will have several modules, including, Financial Accounting and Controlling (FICO) module. FICO module comprises of procurement, payments, recording, assurance of correctness, and performance. Secondly, the Human Resource Management System (HRMS) module will incorporate all the employee personal data, terms, and organizational placement. Lastly, the Sales and Distribution (SD) module will interconnect and automate all the Endothon plants. It will also include the clients' data, distribution information, and inventory loads.

The services from the selected vendor will be the selection, configuration, and implementation of the ERP system and the accompanying after services such as maintenance, technical support, over the warranty period of 24 months upon installation. For the vendor to qualify, they should have a minimum of ten years’ experience in the development and installation of ERP structures. The vendor should be 100 percent independent, meaning that they should not be selling on behalf of another manufacturer vendor, or organization for a fee or commission. The consulting firm must have evidence of at least three information strategic plans or related projects within five years in the public sector. Lastly, the firm should be able to maintain errors, omissions, and workers' compensation policies that exceed or surpass the essential requirement of the organization as designated in the company's master service agreement.

Project Sponsor, Stakeholders, and Steering Committee

Stakeholders are the individuals who have interests in a business or an undertaking and are comprised of the owners, the management, staff, clients, and the supplier. The stakeholder in Endothon includes; Maria Sousa, the Chief Executive Officer (CEO) with over 30 years of experience in the aviation sector. Secondly, the Chief Operating Officer (COO), is John Prescott, who is a retired pilot at the Royal Air force (RAF) and international aeronautical manufacturer.

Alice Trebold holds the office of the Chief Supply Chain Manufacturing and has over 25 years of experience in plant and material management in various aircraft manufacturers. Sam Goodwin is a senior vice-president of the sales and has around 23 years of sales and marketing experience in numerous international aerospace. The human resource department has a senior vice-president by the name of Ann Scofield with over 20 years of experience in employee management in various multinational companies, including Unilever, Axon, and IBIS. Kevin Cahill serves as a chief financial officer (CFO) and handles all the domestic and international finance of the company. Jon Rasmussen serves in the capacity of chief marketing officer (CMO), having 20 years of experience in several European airlines. Mei Lee is the current Chief Information Officer (CIO) with more than 15 years of experience in the innovative IT departments for Fortune 500 companies. (Insert your name) serves as the senior director of information technology—lastly, the more than 4,600 employees and the company's broad international clientele and suppliers.

All of the mentioned individuals are the stakeholders since the implementation of this project will largely depend on the information they provide, the facilitation fee, and their varied input. Others will be affected in that the data processing will be more manageable, meaning that getting services or payment will be much easier than earlier.

Strengths and Weaknesses of the Proposal from Bullzai Ltd

Bullzai Ltd is one of the two companies that are competing for outsourcing the ERP services of Endothon. Some of their strengths are their commitment to finish the project within the stipulated time and budget and assurance with evidence of how their system has introduced changes in other similar projects. Besides, the company has introduced a system designed to be fast, valuable, and innovative. Their approach has extensive configuration options, meaning Endothon will get additional services fitted to the business processes and the preceding customization. The advantage of this is that if the company expands or has an overhaul of operations, they can easily customize the system to fit the new requirements.

The second strength is that their system has a rapid integration with the SAP by the use of the Oracle Web applications. Their design also has the Built-in Artificial intelligence meaning it introduces modernity and dashboard for monitoring and reporting the performance as well as identifying and addressing all the exceptions. The company also has one of the best completion rates, with a majority of their projects being finished way ahead of schedule. Lastly, their product is familiar and secure to use.

Bullzai's weakness, as stated, is, no software can handle everything meaning there might be some gaps pre or post-installation. Additionally, the possibility of additional configuration might introduce weaknesses to the system, thus exposing the company's system to hacking internally or externally. Their approach has a history of being hacked, compromising the banking information of approximately 100,000 individuals. Though they have implemented several security layers since then, the customization options might introduce a weakness that will expose the client system. Another drawback is the language barrier, as has been witnessed in their execution of duties in other companies. Their employees can be difficult for a majority of the Americans and Europeans to understand.

Strengths and Weaknesses of the Proposal from Synesthor Ltd

Besides meeting all the stipulated requirements as per the Endothon needs, Synesthor has a distinguished history of offering the ERP systems, having sold over $ 679 million, and extensive 15 years of experience. This means that their customer base entrusts them in systems installations. Besides, the company has numerous client service representatives who are American, and it is predominant in eastern Europe. Thus, it will efficiently eliminate the language barrier and quickly speak English that a majority of Americans can understand. The company is known to have improved collaboration between the department and improved listening to customer needs, meaning the execution is what the customer wants. They recognize the significance and power of using the network as a platform and, if used correctly, will lead to integrated solutions development towards convergence. The company can cut costs and improve efficiency, as evidenced by their extensive work experience using virtual technology, meaning the introduction of modernity and its benefits. They use the power of web services and the connected network to leverage talent and new capabilities depending on the need, while at the same time maintaining innovative futuristic productivity and achievement of the milestones. Lastly, the company can support departments with the ability to improve the return on investment through the utilization of the standard infrastructural components.

One of the weaknesses is that it has a history of bankruptcy or failure to afford the employees' payroll in 2012, meaning its going concern has once been deeply damaged. Secondly, it has a new owner meaning the 15 years of experience is shared between two owners who have different work models. As per the requirement, Endothon needs a company with over ten years, which might hinder it. Their method of listening and delivering strictly as per the client's requirement is excellent; however, it limits creativity and input. The company has limited budgetary provisions. The budget limitations or limited resources mean that they might leave the projects incomplete, as shown in their history. Lastly, the company incorporated the ERP system installation as a service recently, meaning it might be exposed to errors.

Vendor

The vendor I would choose is Bullzai Ltd. The company is based in Chandigarh, India, and has numerous offices globally, including the United States, Italy, Germany, and Japan. It is currently valued at $171 million, thus categorized as a medium to large enterprise.

The reasons I would choose this company includes the resource base. Endothon would want to use the services of Synesthor because of their overwhelming benefits; however, Endothon is also focusing on engaging a company with enough resources to deliver as per the requirements. As the person in charge of IT, I would want a company that would provide what it promised, test it, and prove that it is working before they can be paid. The only company that is capable of delivering such among the choices we have is Bullzai Ltd.

Secondly, the company has a history of delivering the promised services way before schedule. As per the requirement, the ERP must be implemented within ten months. If earlier, the better so all the services can resume normalcy. The company also has a rich history of implementing a nearly 100 percent perfect project. This means that the benefits such as value for money, speeded integration, business AI, ease of use, and extensive configuration option will be implemented as indicated. These are some of the requirements and needs that Endithon is looking for, which will improve Endothon efficiency, thus saving money and time.

Being a multinational company means that the issues with language can be easily solved. The management can decide to engage the individuals, or locals within the area where the system is required. The company has only witnessed a security breach once, meaning that though the configuration and customization might introduce compromises, the company has managed to respond effectively and introduced layers of security, making it harder for the same or advanced security breach. This also means that the company manages to solve the system issues quickly. Lastly, the company is within the Endothon budget despite promising all of the associated extra benefits.

Solutions to the Key Weaknesses

As indicated, one of the critical weakness is the security breach. This occurs when there is an incidence of unauthorized access to the data, application, networks, services, and devices by bypassing the installed security mechanism. As companies integrate technology in every sector of their business, there is increasing unethical acts either from within or without the organization. Bullzai will be requir...