Issues on IT outsourcing and surveillance in the workplace

Introduction
In todays fast-paced and constantly progressing world, organizations are facing a
great number of challenges to their business decisions and management patterns.
This paper will focus on the issues of IT outsourcing and workplace surveillance and
provide an overview of the motivations, pros and cons and impact on organizations
of these two management issues.
Outsourcing history and current trend
The history of outsourcing can be traced back to the 1980s with IT companies such
as EDS and IBM who maintain large scale mainframe data centers and provided IT
outsourcing services. By the 1990s, the Internet technologies started to boom and
Application Service Providers (ASP) offered web based application services. And the
current trend in IT outsourcing is cloud computing. [reference]
Definition of outsourcing
Outsourcing is the practice of turning over responsibility for some or all of an
organizations information systems applications and operations to an outside firm
(Fuller, Valacich & George, 2008, p.356). Piccoli(2008, p.314) defines outsourcing as
the process of acquiring products or services that used to be produced inside the
organization from an outside provider.

Motivation for outsourcing

Businesses adopt an IT outsourcing strategy for a variety of reasons. The primary
reason is to reduce costs (Brewer & Dittman 2010, p.411). Having the IT functions
outsourced, organizations can cut down their personnel cost for IT staff significantly.
(put an example here). Expenses relating to staff training, maintaining an IT
infrastructure, purchasing hardware and software for the IT department (among
others) will also be saved and can be diverted into developing other functions
[reference]. Another reason for outsourcing is that organizations can focus on their
core business, with the aim of maximizing profits and efficiency [reference].
Moreover, organizations sometimes choose to outsource IT functions because they
lack of in-house expertise [reference].

Benefits of outsourcing
An obvious benefit from outsourcing is the financial saving as organizations no longer
need to invest extra capital to support IT department. Rather, this investment
becomes the responsibility of the chosen service provider. Thus organizations can
focus on their core business and do what they do best. The savings on the IT function
can then be spent on expanding the business or investing in other equipment that
supports core business functions.
IT outsourcing does more than just cutting down cost. Outsourcing streamlines IT
functions by reducing the amount of time and organizational resources required by
these tasks. Instead of setting up a fully functional IT department to support
necessary IT operations such as email, networking and telecommunications,
organizations can outsource these activities to an external service provider with
more advanced technical knowledge and experience. By doing so, organizations can
expect a more efficient work force [reference or qualify]. Moreover, outsourcing IT
services reduces overhead cost through reduced expenditure on manpower,
electricity and [office space].
Another benefit from outsourcing is that vendors provide options for organizations
with limited resources access to IT staff and on-site service. Maintaining an IT
department requires extensive spending in employee training and development. By
outsourcing, organizations can benefit from gaining access to the vendors
experience, which can take years to develop. Vendors have often spent years
developing a supply chain of their own, and the technologies and resources that they
possess can help organizations to create the IT environment that they require.

Concerns and risks of outsourcing

A significant risk of outsourcing the IT function is that the vendor might not possess
the technical capability to provide what they have promised. IT outsourcing
companies are finding it challenging to acquire qualified, professional staff like many
other business sectors. In many situations, service providers hire less-qualified
employees to provide services to their clients. This may lead to increased operational
errors, extra costs for staff training and require more time to complete certain jobs.

Another risk is that the vendor may take more time to perform a job than expected.
Having a strict Service Level Agreement (SLA) is one way to protect the organization
and ensure that the vendor delivers quality service. Data security is also a major
concern when organizations decide to outsource since the service provider has
access to the organizations sensitive information such as payroll details, customer
lists, and other confidential data. It is imperative to ensure that the organizations
data is securely protected when it is transmitted using the vendors facilities.

Workplace surveillance
The advanced information technology has given employees new media for
communications, but it has also provided employers with an increased ability to
monitor their employees. More and more organizations are using various
surveillance technologies to watch their employees in the workplace. In a survey
conducted by Price Water House Coopers suggested that more than 50% of the
leading companies in Australia use video surveillance equipment to monitor their
employees. And in Hong Kong, over 60% of organizations have installed various types
of surveillance systems in their workplace (Stone 2008, p.319).
Motivation for workplace surveillance
Organizations are concerned about the financial and public relations risks associated
with inappropriate or illegal conduct by their employees. One driver for workplace
surveillance is diminished productivity through improper conduct by employees. A
study [reference] showed that 30 to 40 percent of workplace productivity is lost due
to excessive web surfing. Another concern is that improper employee conduct may
result in potential legal liability. For instance, a UK based company was forced to pay
over US$700,000 because of an offensive email [reference]. Further, in the United
States, Morgan Stanley faced a US$60 million damages claim from two
African-American workers after a Caucasian colleague spread a racist joke (Stone
2008, p.320). Employers are also concerned about confidential data theft. British
police also plan to monitor the attitude and behaviors of all new recruits via the use
of informers. (Stone 2008, p.320)
Types of surveillance
There are many ways to monitor employees in the workplace. Common forms of
workplace surveillance include Internet activities surveillance, desktop surveillance,

phone monitoring, and video surveillance. Since more and more employers are
turning to surveillance systems for monitoring employees, it is important to consider
the possible advantages and disadvantages that they might have on organizations.
Advantages of surveillance
Improving work efficiency is the main goal for carrying out workplace monitoring.
Employers expect that their staff will be attentive to their duties and discourage
employees from spending time on dealing with their personal affairs during work
hours. Having surveillance in the workplace has proved to be effective in enhancing
work productivity [reference]. Employers can easily trace employees internet
behavior by checking network resources to determine whether their web access is
for business or personal use. Telephone and email monitoring can also achieve this
purpose. According to a survey conducted by the American Management Association
in 2008, approximately one third of all organizations have dismissed employees for
inappropriate viewing of internet content or excessive personal use of internet
resources.
Another advantage is that surveillance can provide employers with protection against
legal liability for employee misconduct. For example, if the company is facing a sexual
harassment claim as a result of misuse of their resources, or an employee is caught
stealing or neglecting their duties, clear evidence can be provided through the
surveillance systems.
Disadvantages of surveillance
Despite the advantages the workplace surveillance, it also has some negative effects.
Firstly, employees know that they are being monitored and this may create an
atmosphere of distrust. This may lead to increased stress if employees feel that they
are under pressure to maintain a desired level of productivity. Secondly, workplace
surveillance brings up the controversial issue about the invasion of privacy. xxxxxxx

Conclusion
This paper has examined the issues in outsourcing and workplace surveillance.
Outsourcing is the process of delegating all, or part of, IT operations to an outside
service provider. Outsourcing can reduce costs and allow the organization to focus on
its core functions. However, outsourcing also introduces some risks, such as poor
quality of service from the vendor and less control over sensitive and confidential

information. With respect to workplace surveillance, it was noted that workplace

surveillance can enhance productivity and protect organizations legal and financial
position, but it may have negative effects on employee morale. Workplace
surveillance also raises the question of invasion of employees privacy.