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Classification Comment 
Ad hoc
The organisation has a short-term requirement for increased IS/IT skills. An example 
would be employing programmers on a short-term contract to help with the 
programming of bespoke software. 
Project 
management
The development and installation of a particular IS/IT project is outsourced; for example, 
a new accounting system. 
Partial
Some IT/IS services are outsourced. Examples include hardware maintenance, network 
management or ongoing website management. 
Total
An external supplier provides the vast majority of an organisation's IS/IT services, eg 
third party owns or is responsible for IT equipment, software and staff. 
BPP Tutor Toolkit Copy

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PART A: THE BUSINESS ORGANISATION, ITS STAKEHOLDERS AND THE EXTERNAL ENVIRONMENT 
 
44
 
9.5.2 The advantages and disadvantages of outsourcing 
Advantages of outsourcing 
The 
advantages 
of outsourcing are as follows. 
(a) 
Outsourcing can remove uncertainty about 
cost
, as there is often a long-term contract where 
services are specified in advance for a 
fixed price
. If computing services are inefficient, the costs 
will be borne by the FM company. This is also an incentive to the third party to provide a high 
quality service. 
(b) Long-term 
contracts
 
(maybe up to ten years) encourage 
planning 
for the future. 
(c) 
Outsourcing can bring the benefits of 
economies of scale
. For example, a FM company may 
conduct research into new technologies that benefits a number of their clients.
(d) 
A specialist organisation is able to retain