Re: Outsourcing (was IS Assets) -- MIDRANGE-L

I work for an outsourcer so I'd have to say good experiences.  *grin*

Though seriously it greatly depends on your needs.  For a company with a
technology focus (ie.  a telecommunications company, or the like) I think
outsourcing is probably not a good idea.  You need to rely on cutting edge
technology to cope in rapidly changing business environments and you can't
necessarily do that if you are buffered from the front line by an external
supplier.  If, however, you are a company who want to focus on core business and
IT isn't core business for you then getting someone else to do it for you is a
good thing.  Again also depends on the outsourcer.  There are some companies out
there I wouldn't wish on anyone.  I would say choose wisely and bargain hard.

Regards

James Turnbull
Senior Technical Consultant
Kaz Computer Services
6/66 Wentworth Avenue
Surrey Hills, 2010.
Sydney, NSW
AUSTRALIA

Work:  061 2 9844 0380
Home: 061 2 9565 4954
Mob:    0411 866 112






Roger Boucher <RBoucher@stanpac.com> on 05/08/99 10:05:33

Please respond to MIDRANGE-L@midrange.com

To:   "'MIDRANGE-L@midrange.com'" <MIDRANGE-L@midrange.com>
cc:    (bcc: James Turnbull/Sydney/KAZ/AU)
Subject:  Outsourcing (was IS Assets)




This reply got me thinking (always a dangerous thing to be avoided at all
costs).  Does anyone out there have any experiences with outsourcing
services for IS?  If so, are those experiences generally good or bad?  What
positives and negatives?

Just wondering...
Thanks.

-----Original Message-----
From: HankHeath@aol.com [mailto:HankHeath@aol.com]
Sent: Wednesday, August 04, 1999 2:27 PM
To: undisclosed-recipients
Subject: Re: IS Assets


To summarize responses to this point:

If you are part of the IS team asked to value the IS shop in a merger or
acquisition, you can say
* the hardware is worth the purchase price minus scheduled depreciation
* the purchased software is a very small fraction of the original purchase
price
* developed software is worth whatever the purchaser sees it to be (this may

be a major feature of the transaction, as in a Web-based business, or
meaningless, as in home grown accounting software)
* the staff is worth whatever it costs to replace the half of them that
leave.

Pretty dismal, unless you are a Web-based business. It would seem that
generally we do not contribute much to the net worth of the company, from an

accounting perspective. At the same time, we do contribute a lot to the
operational costs to the enterprise.

In view of this, if I was palnning to sell a company, the first thing I
would
do is outsource IS. I could rationalize that since there is little inherent
value to be passed on, it makes sense to minimize the expenses by turning
the
operations over to a professional firm. When the sale was transacted, the
new
owner would not have to worry about software maintenance and staff turnover.

They would walk into a stable environment. Does this make sense?

Hank Heath

In a message dated 8/3/99 8:22:27 PM Eastern Daylight Time,
HankHeath@aol.com
writes:

<< Here's a question that came up recently:

 If we are selling a business, how do we value the worth of the IS assets?
In
 otherwords, on a balance sheet, what value is retained from IS during a
 transfer to another owner? I can value the hardware easily. However, there
 are also values that can be tacked on for software purchased and developed,

 the unique industry knowledge of the staff (if the new owner can retain
 them), and the ruggedness of the environment. Has anyone a way of attaching

a
 value to any of these last items? >>
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