Question

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Creating a coherent IT infrastructure would first require Dirt Bikes USA to conduct a thorough technology assessment of the present strategy, existing ecosystem, and competitive forces to determine market demand and the organization’s individualized needs for scalability and flexibility of specific strategic technologies, as well as the budget allocation for such an investment. Dirt Bikes USA must specify which roles would be responsible for controlling the management, maintenance, and governance of the necessary infrastructure, while maintaining quality and ensuring security. Potential external systems suppliers need to be identified as options, and service level agreements drafted to set quality standards. Any implementation of new infrastructure would also require new policies, procedures, and trainings. In the case that Dirt Bikes USA chooses not to collaborate with remote vendors, all of the direct and indirect cost components of this infrastructure investment must be considered in order to determine total cost of ownership; these relevant components include hardware acquisition, software acquisition, installation, training, support, maintenance, infrastructure, downtime, and space and energy.

Tradeoffs : Cost versus control & Custom Culture versus professional support

Advantages and Disadvantages of owning versus outsourcing

Owning

Staff: advantages: enhanced human capital, job security

Disadvantages: staff may resist change, addition of tasks may take focus off core competencies

Computer Servers / Software Licensing/Data Storage:

advantages: Dirt Bikes USA would have more control and could tailor their programs to fit their business strategy and culture, scalability, pay for what you use

Disadvantage: high cost of acquisition

Outsourcing

Staff:  advantages: staff flexibility and wider pool to choose from, continues to allow current employees of Dirt Bikes USA to focus on core business competencies by outsourcing professionals

Disadvantages: decrease in competitive advantage and intellectual property as competitors also staff from same pool, outsourcing knowledge, communication, loss of quality

Computer Servers:  Software Licensing-Data Storage-

advantages: Access to up-to-date resources managed by professionals

Disadvantages: security risks, hidden costs, relinquished control

Other combinations of outsourcing:

Dirt Bikes USA could retain in-house staff and enhance consumerization through BYOD and/or the operation of legacy systems, and also outsource data to be stored by a cloud computing company. Software as a Service (SaaS) would allow Dirt Bikes USA to pay a monthly service fee to use services delivered over a network and hosted by a vendor on their cloud infrastructure, while retaining their employees. A hybrid cloud computing model could also be beneficial, allowing Dirt Bikes USA to maintain control of essential cloud activities, and outsource less-critical systems.

Answer 1

Here Dirt Bikes USA has two options for Creating its IT infrastructure. First option is Owning all the IT related Infrastructure itself and bearing all the related cost by itself. Whereas, in second option, it also has an option to Outsource the IT related Infracture maintence to remote vendor.

If it consider Owning option, it gets following outcome:

Advantages:

1. enhanced human capital & job security

2. More control and could tailor their programs to fit their business strategy and culture, scalability, pay for what you use.

Disadvantages:

1. staff may resist change and also addition of tasks may take focus off core competencies.

2. high cost of acquisition.

If it consider Outsourcing option, it gets following outcome:

Advantages:

1.  allow current employees of Dirt Bikes USA to focus on core business competencies by outsourcing professionals.

2. Access to up-to-date resources managed by professionals.

Disadvantages:

1. decrease in competitive advantage and intellectual property as competitors also staff from same pool, outsourcing knowledge, communication, loss of quality.

2. security risks, hidden costs, relinquished control.

Final Comment:

Here, Considering both the positive and negative impact of self owning and Outsoucing, we can conclude that the decision of choice totally depends open the management of the company. However considering the current sights, it is more clear that Outsourcing gives a company more option for flexibility and option to handle the IT infrastructure managed in more professional way with divese options at the same time, employee can also focus on their core business activity.

Hence, Management of Dirt Bikes USA should consider all these points while taking the suited decision to its business.