Quiz Answer

Outsourcing Its IT, Kone Is Focusing on Its Core Competencies

***************************************************************************************
Question for Minicase 2:

1. What were the major drivers of the outsourcing at Kone?

Major drivers of the outsourcing at Kone:
- Kone found out that their internet IT processes were insufficient to support
the globalization strategy.
- Kone is contribution to reducing the administrative cost of global sales was
minimal.

2. Why did Kone elect to work with several vendors?

Kone elect to work with several vendors because:
- The outsourcing vendors guarantee to have the system available 99.5% of the
time.

3. What are some of the risk of this outsourcing?

Some of the risks of outsourcing:
- Management risks
- long-term exclusive outsourcing isolates the organisation from the marked.
There is a risk in trying yourself to one suplier in a rapidly charging
marketplace.
- While vendors are busy managing the IT services for the company, they are
also be busy building relationships with the company's business peers and
taking work that may have come on company's way.

- Technology risks
- Regulatory compliance
- Threats to security, availability and integrity of resources.

Advantages and risk of outsources:
- Advantage:
- Cost saving , able to save a significant amount of money.

- Risks:
- Lose some element of control over the people that are undertaking the
particular job or operational functions that have been outsourced.

4. How can Kone control its vendors?

- Kons maintains some IT competencies to allow it to actively manage its vendors.
- Kone's internal team meets online regularly, and the vendors collaborate and
work closely together.