Dirt Bikes Case Study
Reduction of cost of production is desirable (Bustinza et al, 2010). However, it is imperative to take into consideration factors such as control of core competency of the Dirt Bike company, outsourcing core competency may give away the secrets responsible for the company success and increase unwarranted competition in the market niche. Another important aspect of consideration is the level intellectual property ownership of services provided. If the management wished to maintain complete ownership of the process and system, they may consider in house production. It is recommendable to ensure terms of the outsourcing Service Level Agreements (SLA) clearly define the intellectual ownership of the service or products provided(Harland, et al. The software requires stable and robust infrastructure with high reliability in order withstand disaster and avail services in emergency periods.
Failure of the software or its support system such as storage can be catastrophical to the financial and reputation of the Dirt Bikes. As Infrastructure investment, it is necessary to ensure efficiency and accuracy of the software in order to reduce limitation at the workplace, and boost growth and successful achievement of the goals. The software will require high uptime and reliability (Chow et al. Therefore, seek services of a cloud based software service provider is a recommendable action. Staff member involved in the core competency areas of the production is undesirable as they play crucial role in managing the production process. Outsourcing some staff duties can help the remaining employee to concentrate on the core operation of the organization (Bustinza et al, 2010).
The decision to important to own or outsource depend on the available skills levels. If the skills available are inadequate. It is recommendable to outsource professional skills from reputable organizations. Placing the computer system to another party may harm the company in case the party’s security are infringed and company’s data stolen. However outsourcing the computer services to cloud based service provider allows for employee and service mobility, as it can be accessed away from workplace (Chow et al. Software licensing Owning software licenses is crucial in copyrights and utilization of the software in production. Outsourcing license can infringe the safety and ownership of the production depending on the software. Outsourcing license can hinder management of the software at the company level hindering crucial evolution and development that can affect the competitive edge and performance of the company (Harland et al.
Core competency operation should be retained within the organization while supportive services such as website hosting can be contracted to reliable external agents that have the reliable expertise and technology to run the operation better than company staff (Belcourt, 2006). The benefits of ease to use outweigh the need for excessive control over information in the system as only the management can access crucial data on the system. Of the 4 key system components -- staff, servers, software and data storage -- are there other combinations of outsourcing • They can own the server but outsource data storage to a cloud company • Own the software license but outsource skilled staff and data storage services • Outsource the data storage and servers to cloud based companies to reduce infrastructure required but retain software licenses integrate the service into the company production.
What other future infrastructure needs might be relevant in this decision, for example will Dirt Bikes need other software applications and databases? Dirk bikes is a relatively small now. However, with effective management and suitable business environment the company is bound to grow, expand, and grow at an exponential rate. It is cost effective to outsource some of the hardware and software services such as hosting of the hardware and software part of the operation that are not do not affects the core manufacturing process. Web hosting, ecommerce, maintenance and storage services and other resource intensive yet non-core services should be outsources. It is important to ensure the system included in the organization support redundancy and scalability for future expansion and business continuity.
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