Describe situations wherein an IS project may need or wish to use subcontractors.
Purposes for using subcontractors include:
a. Lack of resources or skills: The organisation may not possess the essential skills or may not have adequate people with these skills, particularly if this is undertaking lots of projects at similar time.
b. Pressure to decrease headcount: This may be more ‘politically’ acceptable to have the work completed externally even at raised cost – than to retain people onto the permanent establishment.
c. Relative costs: Occasionally, a subcontractor may be capable to offer economies of scale and therefore lower costs than along with an in-house team. An extremely contemporary manifestation of that is to ‘offshore’ work to places as like UK where highly-trained personnel are employed at much lower rates than are the norm into Europe.
d. Specialised skills needed: The project may call for very specialist skills definitely and these may only be obtainable from specific organisations.
e. Risk transfer: The organisation may hope to transfer some or all of the risk as technical or commercial to other party.