1

Author:
Title:

Pharo, Jacob N.
In-house or Outsource IT Needs

The accompanying research report is submitted to the University of Wisconsin-Stout, Graduate School in partial
completion of the requirements for the

Graduate Degree/ Major:

Research Advisor:

Sally Dresdow, PhD.

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Number of Pages:

MS Information and Communication Technologies

Spring, 2015

32

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Pharo, Jacob N. In-house or Outsource IT Needs
Abstract
(No more than 200 words)

3
Table of Contents
Abstract

List of Tables 5
List of Figures 6
Chapter I: Introduction

Purpose of the Study 8

Assumptions of the Study
Definition of Terms

Limitations of the Study

Methodology 9
Chapter II: Literature Review 10
Information Technology (IT) 10
Technologies 10
Standard Documentation
IT Responsibilities

12

13

Preventing Negative Impacts 14

IT Staffing

16

In-house IT benefits...............................................................................................16
In-house IT negatives.............................................................................................17
Outsourced IT benefits...........................................................................................19
Outsourced IT negatives........................................................................................20
Chapter III: Methodology

22

Cost-Benefit Analysis 22

4
Outsourced businesses...........................................................................................22
In-house IT.............................................................................................................24
Interpretation 25
Limitations

25

Summary

26

References

27

Appendix A: First Appendix 31

Appendix B: Second Appendix

32

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List of Tables
Table 1: This is an Example of how a Table Title Should Look

11

Table 2: Must Have at Least Four Tables for a List of Tables.......................................................12

Table 3: Examples of Tables..........................................................................................................13
Table 4: Table 2 Through Table 4 are Fake Table Titles Helping to Display a Proper List of
Tables.................................................................................................................................14

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List of Figures
Figure 1: This is an Example of how a Figure Title Should Look

12

Figure 2: Must Have at Least Four Tables for a List of Tables......................................................13

Figure 3: Examples of Tables.........................................................................................................14
Figure 4: Figure 2 Through Figure 4 are Fake Table Titles Helping to Display a Proper List of
Tables.................................................................................................................................15

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Chapter I: Introduction
Company XYZ is a manufacturing company that has one central location for major
operations and one regional location for warehousing and inventory management; it has
experienced increased sales for over nine months. The growth resulted in the hiring of additional
personnel to meet the increased production demands. In spite of the companys growth, the
Information Technology (IT) staffing budget was not increased and has only one individual for
the entire company. This individual is in charge of handling support for the company at both
locations in relation to: hardware, software, applications, servers, networking, phones, security,
and IT vendor relationships.
Due to the extensive support required and the need for constant uptime, the IT
individual's available time to research and prepare IT projects is minimal. The lack of time
places him at a disadvantage because he holds no professional IT experience prior to Company
XYZ. He was previously a mechanic at Company XYZ before his technology skills and interests
allowed him to switch positions and become the sole IT staff person. The combination of
inexperience and demands placed on him has caused an increase in stress, project delays, and
reliance on vendors for support. Project delays have been caused by the lack of knowledge
requiring additional research, waiting for responses from vendor support, and needing to have
approval for the cost of vendor support that is outside of contract parameters. Company XYZ
has vendor support contracts in place but only under certain circumstances. If vendor support is
required after normal business hours or support on technology in addition to what is listed in the
contract is needed, additional fees are required.
Statement of the Problem

8
The requirements for a new, larger IT infrastructure at Company XYZ and the limits of
having one IT individual, created delayed project implementations and increased costs in vendor
support contracts. Based upon the expectations of continued growth, should Company XYZ
consider outsourcing portions of their IT needs to a third party, or should they increase their IT
staff?
Purpose of the Study
The purpose of this study is to investigate alternative support opportunities, while staying
within the budget. These findings will be used to improve IT conditions throughout the company
and develop a plan to prepare for continued growth in relation to their IT needs and
infrastructure.
Assumptions of the Study
It is being assumed that Company XYZ will continue to grow and is willing to allocate
the necessary resources in order to conduct research. In addition, it is assumed that any prior
research conducted will not be used and any predispositions regarding companies based upon
prior quotes will be a nonfactor.
Definition of Terms
Bottleneck. A point of congestion or limitation.
Chain of Command. A document that defines the levels of authority beginning at the
top of the organization, and moving to the bottom.
Exabyte. A unit of information that is the size of one billion gigabytes.
Information Technology (IT). "The technology involving the development,
maintenance, and use of computer systems, software, and networks for the processing and
distribution of data" ("Information Technology," n.d.).

9
Epic. A business that creates Electronic Health Record (EHR) software for the medical
industry.
In-house. Existing or providing within a company.
Outsource. Goods or services provided to the company from an outside source.
Oversight. The act or job of directing work that is being done ("Oversight," n.d.).
Proof of Concept. A demonstration which verifies feasibility.
Prototype. "An original or first model from something which other forms are copied or
developed" ("Prototype," n.d.).
Pilot. "A test to see if a larger program, study, etc., should be done" ("Pilot," n.d.).
Uptime. "Time during which a computer or machine is working" ("Uptime," n.d.).
Vendor Support Contract. Contract defining the costs, terms, and conditions of support
a vendor will provide for the company.
Limitations of the Study
The limitations of this study are dependent upon the researcher's ability to find the
appropriate outsourcing businesses to contact for a quote, and on a capable individual applying
for the in-house position. The results of the study will not define the only options available for
Company XYZ, but provides recommendations for upper management to consider.
Methodology
The research method requires gathering data from reported industry pay in a specific
region, and receiving quotes from outsourcing businesses that are capable of matching the needs,
values, and future goals of Company XYZ. The data gathered will be itemized in a cost-benefit
analysis allowing for comparison.

10
Chapter II: Literature Review
Should Company XYZ plan for an increased IT staff or help from an outsourced IT
business to alleviate the growing pains that have been felt in relation to its IT needs? In order to
find an answer to this question, case studies, research articles, and IT project implementations
will be reviewed. By understanding the successes and failures from other businesses in regards
to their IT department, a more beneficial recommendation can be prepared.
Information Technology (IT)
IT has become one of the most important aspects in a company, but is often one of the
least understood areas (Williams, 2003). The word IT has become a blanket term to describe
individuals who support technology, which is a misconception. IT is the technology itself, or as
Merriam-Webster states: "the technology involving the development, maintenance, and use of
computer systems, software, and networks for the processing and distribution of data"
("Information Technology," n.d., para. 1), and the individuals within the IT department are the
individuals who support the technology.
Technologies
People have become more immersed in technology and have adapted their personal
learning styles to reflect a constant need to be connected. Jisc, formerly Joint Information
Systems Committee, a public body on higher education support and research in the United
Kingdom, studied students expectations and experience with technology as they went into higher
education. The study was conducted from 2014 to 2015 with 12 focus groups, and a total of 220
subjects across 6 colleges (Beetham, 2014). They determined that there was an expectation to be
constantly connected. This expectation to be connected has caused an increase in the amount of
technology that an IT department must support to develop a work environment that is appropriate

11
for this new style. The Internet has become almost always within reach through cellular
networks on personal devices, such as cell phones and tablets, or work issued laptops, desktops,
and other devices on the corporate Wi-Fi.
As expectations have changed, the expected work environment has as well. What once
was done with paper and pen is now sought to be an electronic resource so that it may be more
easily manipulated and shared with coworkers. The University of Leeds' review of the changing
roles and responsibilities of their IT staff to develop plans for the next 20 years discovered:
The most significant impact of the growth of IT for computing support staff was the
increase in the numbers of people requiring access to computing and IT resources and
support. This had also resulted in an expansion in the range and level of work that they
were required to undertake. (Callender & Whyley, 1997, para. 16)
As electronic resources increase, more individuals are required to have technology in order to
successfully and efficiently perform job functions. This has also caused in increase in the types
of devices that the IT department will support and the amount of devices they support. The IT
department supports:

hardware,

software,

applications,

servers,

networking,

virtual private networks (VPNs),

email,

12

telephones,

printers,

fax,

IP telephony,

wireless,

websites,

security,

IT vendor relationships.

The support listing is ever-changing and expanding as the companys technology needs change
and grow, and technological advancements are created.
Standard Documentation
To support such a wide range of technologies the IT staff depends upon developing
standards and detailed documentation. The failure of Epic electronic medical records (EMR) by
Martin Health System reaffirmed their need to maintain accurate forms of documentation in
preparedness for all emergencies (McCann, 2014). In that instance, a device failure caused the
thirteen facility hospital system to lose access to their EMR system and various other crucial
applications for patient care. Hospital staff resorted to manually entering data through set
standards and procedures for protecting patient safety and preparing documentation for the return
of the system, which took roughly two days. IT staff utilized their own documented standards
and procedures to troubleshoot which hardware had failed and why, in order to resolve the
problem and prevent it from reoccurring. Important documentation for an IT department
includes:

13

chain of command,

standard procedures,

network diagrams,

inventory listing,

patching schedule,

disaster recovery plan,

knowledge base documents,

manuals,

backup configurations,

vendor support contracts.

Organizations may have varying documentation practices, which can include electronic
documents located in a shared folder, specialized managed software, or physical copies. The
depth and usefulness of the documentation is based upon how diligent the creator was in his or
her development and if the document is maintained with consistent updating.
IT Responsibilities
The role of IT is to support the core function of the company. This is done by ensuring
all technologic needs of the company are being met, and all future needs are capable of being
met. The Hospital of the University of Pennsylvania (HUP) in 2000, installed a new patient flow
management system allowing them to move toward a new electronic friendly system. This IT
managed system tracked patients through the entire surgery process, which allowed for an
increase in patient care, satisfaction, productivity, revenue, quality of care, employee satisfaction,
and a streamlined patient flow (McHugh, 2004). HUP utilized technology and their IT staff to

14
improve upon the core function of the company as a hospital, which is to provide quality health
care to patients. IT staff perform help desk duties that allow him or her to hear from the
employees or customers, many of the shortcomings that occur, and how they would like things to
be done. This information can be used to improve process workflows and increase efficiency. In
order to achieve positive results, such as HUPs implementation, IT needs to be aware of the
future plans, goals, and visions of the company to assess the existing infrastructure and prepare
plans to ensure that the core function is being achieved as efficiently as possible.
Preventing Negative Impacts
There are many precautionary actions that take place to prevent the negative impacts that
may occur from a failed IT task or project. As was the case with NSK Inc. when an IT staff
member noticed slowness in printing during his routine network monitoring (Briggette, 2011).
The slowness correlated to critical servers having max CPU usage due to a vendor-applied patch.
He was able to solve the problem by removing the patch before it began to disrupt the entire
network. NSK Inc.s IT staff utilized a proactive approach through monitoring, in an attempt to
solve a problem before it became exponentially worse. It is better for an IT department to use
this proactive approach versus reactive, which can be done by monitoring, testing, and auditing.
Monitoring provides real time alerts of changes and actions while also logging the alerts
for tracking trends and forming accountability. The ability to track trends is very important to
understanding the health and performance of the network. It allows for the planning of upgrades
and necessary changes that need to occur to prevent bottlenecks within the infrastructure
(Downing, 2013). Monitoring is used to provide a high up-time and increase response time
during critical moments; it provides for easier troubleshooting and the potential to save money
due to the decreased downtime and man-hours deducing the problem, while also improving

15
network security strength. Ponemon Institute, an independent research company, in 2012
surveyed 3,529 IT and IT security practitioners in eight countries to determine the costs
associated with an IT related security breach. The average cost of a data breach per record was
found as being $194 in 2012 (Ponemon Institute LLC, 2013). Depending on the size of the data
breach, the importance of the data leaked, and if the data breach was accidental or malicious, the
average cost per record can increase or decrease.
Testing in IT means to verify functionality prior to implementation through proof of
concepts, prototypes, and pilots. During the initial release of the HealthCare.gov site in 2013 to
provide the public with affordable healthcare options, the site was brought to a crippling halt due
to the poor coding and inappropriate infrastructure, which was caused by the lack of proper
testing phases (Rudansky, 2013). IT projects should be implemented in phases. As a project
progresses through each phase, tests must be done to verify that the expected results will occur
during the production implementation. In the case of the HealthCare.gov website, they missed
the crucial phases before production release in which users test the website to verify they do not
encounter any errors; they also missed the mark by failing to stress test the site. Stress testing is
done by putting more data than is anticipated to be received through the technology to verify that
it will still be reliable and without errors.
Auditing maintains the integrity, reliability, and validity of electronic data. It has become
an increasing trend due to companies developing electronic payment systems, which were used
by 40% of the online population in 2000 and 63% in 2006 (Davis, Gallegos, Senft, 2012). IT
auditing reviews the management controls that are in place within the IT infrastructure,
standards, policies, and operations to accurately protect and comply with federal laws. In 2015,
the state of California's technology department (CalTech) discovered the dangers of failing an

16
audit due to the negative press and federal penalties (California State Auditor, 2015). The state
of California paid $1 billion dollars in federal penalties regarding the automated child support
enforcement system because of the eight year delay on development and implementation. These
federal penalties were in addition to the loss of $1 billion dollars between 1993 and 2013 from
failed or canceled IT projects due to poor oversight.
IT Staffing
Depending upon the size of the organization, the IT department may consist of: one or a
few individuals, many teams with specialized roles, outsourced to a third party, or be a
combination of outsourcing with an on-site contact. Each method has positives and negatives in
relation to capability, quality of work, and costs associated. The method chosen may change as
the company develops and grows. Upper management selects the method based upon the
companys needs, vision, and budget.
In-house IT benefits. Having an in-house IT department has many benefits that are
often not felt until after the choice to outsource has been made. The IT staff is physically present
at the company. This physical presence allows for a faster response time due to the IT staff being
located onsite. Stanford's IT department has standard response times that vary from one to six
hours (Stanford University, n.d.). Response times are a standard that must be set by the company
and will vary per the severity of the task. The times are defined in the standard procedures
document and are used as a measurable variable for IT staff performance.
The IT staff is solely employed by the company, meaning that the IT staff persons time is
solely devoted to the company and its needs. Deloitte Consulting LLP, a company that provides
audit, consulting, tax, and advisory services, in 2012 surveyed professionals across 22 primary
industry sectors in 23 different countries with 70% of respondents being global companies or in

17
more than one geographical region. The survey received 111 respondents and determined that
the factor of improving customer service or customer experience was deemed very important to
62%, and important to 38% of respondent companies that switched from an outsourced business
to an in-house IT staff (Deloitte Consulting LLP, 2012). An in-house IT staff is capable of
visiting face-to-face with the individuals if the need arises. Having the visible presence creates a
more personable environment while improving an individuals experience and interaction with
the IT staff.
Company projects progress at a pace as needed by the company and based upon the skills
of the IT staff. The study by Deloitte also determined that improving controls was very
important to 15%, and important to 62% of the companies that switched to an in-house IT staff
(Deloitte Consulting LLP, 2012). An in-house IT staff understands the company's goals and
visions as they experience them first hand allowing them to improve and plan future IT
infrastructure changes to more accurately reflect the company's goals. Having the IT staff
familiar with the environment of the company and the standard computer setup the employees
use allows them to understand how a project will impact employee workflow and make
suggestions based upon that information.
In-house IT negatives. IT staff are standard employees; they are required to have
vacations, sick leave, and time off. A study by Oxford Economics, an economic forecasting and
modeling company, in 2013 surveyed 971 employees in the United States, regarding the amount
of paid time off (PTO) they received, their perception of PTO, and using it. Workers who
received PTO in 2013 received an average of 20 days, with larger businesses providing
employees an average of 24 days (Oxford Economics, 2014). In a company that requires a high
uptime, having an individual who is the main resource for a technology be unreachable for

18
support is a major concern. The concern is lessened with the use of an on-call rotation and
proper documentation, as long as all members in the on-call rotation have been trained
appropriately in the technologies used and documentation is shared between them. On-call
positions tend to require a higher salary or additional hourly pay to entice worthy candidates.
A newly hired IT professional has many hidden costs. There are administrative costs by
needing to interview, test, and hire an individual. These costs may increase depending upon the
amount and quality of candidates applying. A new hire will require on the job training. The
Association for Talent Development (ATD), formerly known as American Society for Training
and Development (ASTD), a professional membership organization, determined in their 2012
State of the Industry:
ASTD estimates that U.S. organizations spent $1,182 per learner on employee learning
and development in 2011. Of this total direct learning expenditure, 56 percent ($87.5
billion) was spent internally such as staff salaries and internal development costs. The
remainder was split between tuition reimbursement, which accounted for 14 percent
($21.9 billion), and external services comprising 30 percent ($46.9 billion). (as cited in
Conner, 2013 para. 9)
While the new hire may be very knowledgeable in his or her respected areas, each business is
unique in its infrastructure, documentation, and problem resolutions. If the new hire does not
possess knowledge of all technologies, additional or external training may be necessary.
As technology is constantly changing, advancing, and improving IT professionals need to
stay current on IT events and continue education. As Eric Schmidt, a previous Google CEO,
stated during the Techonomy conference in 2010, "Between the birth of the world and 2003,
there were five exabytes of information created. We [now] create five exabytes every two days"

19
(King, 2011, para. 2). To stay current on the latest technologies, trends and news, IT individuals
attend seminars, take classes, go to conventions, review webinars, read articles, and purchase
new technology for testing purposes. These actions all require money that may require
reimbursement, due to being job expenses.
Outsourced IT benefits. Outsourcing holds a negative connotation for many individuals
because there is a lack of understanding. A study by NBC and Wall Street Journal in 2010
surveyed individuals through interviews and phone calls, found that 86% of surveyed individuals
felt that United State businesses outsourcing work to foreign companies was a main cause for a
struggling economy and a high unemployment rate (Teixeira, 2012). To outsource does not mean
to offshore, but instead means to contract an external entity. This outsourcing company could be
a local business down the street, or in the case of IT where remote management is possible, a
different state or country. The purpose of IT outsourcing is to meet a company's technology
support needs in relation to a budget and skill factor. It is often not practical for a company to
hire a full time employee who specializes in a specific type of technology when they are only
needed for one project. Outsourcing allows for a fluctuating demand while maintaining access to
skilled IT professionals.
An outsourcing IT company has many clients of varying size. This allows them to make
recommendations on projects for various budgets based upon successful implementations. IAG,
a business architecture and analysis consulting company, in 2008 surveyed over 100 North
American businesses regarding business requirements on successful IT project implementation
of more than $250,000 (IAG Consulting, 2008). The IAG survey discovered:
68% of companies did not do a good job on requirements when rolling out their last
major project. As a result, only the top third of companies had a reasonable success rate

20
on projects the others had a higher probability of a marginal or unsuccessful project
than they did of delivering one that was successful. (Ellis, 2008, p. 6)
A failed IT project can be costly in monetary value and in the confidence of the companys IT
needs being met. Utilizing the outsourced IT companys experience will assist in achieving the
intended results while reducing the possibility of a failed project.
Companies often have a goal with outsourcing IT to reduce operating costs. Not all
companies are capable of achieving this because they focus solely on reducing IT costs. Gartner,
an IT research and advisory company, projected global spending for outsourcing in 2013 based
upon previous years and new trends and data to be $287 billion dollars (Han & Mithas, 2014).
Outsourcing IT moves from a variable cost to a fixed cost; this allows a company to plan the
budget more appropriately and apply more capital towards the core revenue generating aspect of
the company. Having an outsourced IT also assists in reducing the administrative costs related to
hiring and replacement of IT staff.
Outsourced IT negatives. Outsourcing has its own caveats, as the state of Indiana
experienced when trying to outsource their welfare processing systems. Indiana formed a
contract with IBM for $1.4 billion dollars, which failed due to poor guidance and management.
State officials moved forward with the project without being prepared for change and did not
assist in guidance, while IBM sought to reform the worst welfare system in the nation without
the support of change from the clients who sought the contract (Niccolls, n.d.). Outsourcing IT
duties will not be successful unless it is accepted by all members of a company. All levels of
management must accept the change because they are the individuals with authority to approve
projects, and employees must also accept the change because they are the individuals who rely
on IT support.

21
When the decision is made to outsource, an outsourcing company must be found that
correctly aligns with the company's vision, need, and budget while having the expected skills and
communication abilities. General Motors experienced this concern in 2012 when they decided to
shift from 90% outsourced to 90% in-house due to wanting increased innovation and faster
project turnover rate. General Motors felt that they would be able to provide better services and
products to their customers by having an in-house staff (Savitz, 2012). A company cannot just
test outsourcing companies to determine if they align with the vision. Contracts are necessary,
which state specific costs, times, projects, and types of equipment that will be supported.
Outsourced businesses are also unfamiliar with the client's values and daily events.
Accenture, a multinational consulting company, conducted a study of 200 U.S. business
executives regarding the cooperation between outsourced individuals and in-house staff, which
showed that 53% had different approaches to tasks, and 44% had different attitudes which caused
conflicts (as cited in Paton, 2006). While the outsourced business may be informed of the
company's values, it is not actively experiencing how the company is progressing and being
proactive in meeting its goals. Being unfamiliar with the company can also cause language or
cultural discrepancies, which may trigger a communication breakdown.
The security of confidential data is also a concern when outsourcing. Citi, a
multinational banking and financial services corporation, felt this concern as the Japan Times
reported an individual involved in the outsourced business of Citi Cards Japan Inc. had sold
credit card data to a third party in 2011 (as cited in Kitten, 2011). 92,400 Citi card holders had
their account information compromised. That information included account numbers, personal
addresses, phone numbers, birth dates, gender, and when the account was open. The breach was
limited to only Citi Card Japan holders; however, the reputation for all of Citi was damaged. The

22
risk of exposing confidential information is high due to the increased security risk of having the
data accessible by a outsourced company.

23
Chapter III: Methodology
The possibility of continued stress, project delays, and increased costs due to vendor
support drives a need for Company XYZ to make a change in how its IT needs are being met.
The options being considered are to outsource specific IT needs to a third party, or to expand the
in-house IT staff. A cost-benefit analysis should be conducted to discern which option will
correctly align with Company XYZ's needs, values, and future goals while staying within
budget.
Cost-Benefit Analysis
To perform the cost-benefit analysis, research must be conducted for the costs of both
outsourced IT businesses and an increased in-house IT staff. Services and costs will vary for
outsourced businesses, which require the outsourced businesses to be contacted for a quote. This
quote will need to include all services, technologies, and response times to be provided for
Company XYZ, while also being itemized to compare the expense of each service. To conduct
research on the cost of increasing an in-house IT staff, the average salary for an IT professional
with expected qualifications for Company XYZs location needs to be reviewed. In-house IT
staff also has additional costs, such as training. Training costs cannot be guaranteed due to
various training opportunities depending upon an individuals learning style. An individuals
learning style that utilizes manual reading and lab testing would not have the same costs as an
individual who prefers seminar and boot camp instruction.
Outsourced businesses. The outsourced businesses to be contacted will be chosen based
upon the recommendations of business partners and through research conducted using the
Internet. The outsourced businesses must be capable of supporting Company XYZs
infrastructure, while providing a comparable response and resolution time that that Company

24
XYZ would expect from an in-house IT staff. Required services and expected response times are
shown in Table 1.
Table 1
Cost-Benefit Analysis Outsource
Cost
Standard Response Time
Emergent Response Time
Location
On-site Assistance
Support Staff Available
Technology Supported

Expected Response
01:00 Hour
00:30 Minutes
AA
Y/N
##

Available Response
00:00
00:00

$$
$$

Microsoft Server 2008

Active Directory
Exchange
SharePoint
Cisco

$$
$$
$$
$$
$$

Routing/Switching
Cisco ASA
Avaya Phone System
Linksys Access Points
Windows 7
Multi Function Device
HTML Websites

$$
$$
$$
$$
$$
$$

(Internally Hosted)
Microsoft Office
QuickBooks
Total Dollars

$$
$$
$$

In-house IT. The costs associated with an increased in-house IT staff will be based upon
estimations according to the research conducted. The average salary for an IT professional in
Company XYZs location will be deduced, but additional costs, such as training, cannot be
guaranteed. Training costs will be estimated by averaging the expenses of training courses for

25
technologies that Company XYZ has implemented, which required vendor support due to the IT
individuals lapse of knowledge. Costs under consideration are shown in Table 2.
Table 2
Cost-Benefit Analysis In-house

Yearly Salary
On-Call Hourly Pay

$$
$$

Benefit
Health
Dental
Training
Classes
Books
Seminars/Conventions
Boot Camps
Vacation
Sick Leave
Paternity/Maternity
Family Death

Totals
$$

$$
$$
Cost
$$
$$
$$
$$

Yearly On-Call Hours

##

$$
$$

Quantity
$$
$$
$$
$$
Total Dollars

$$
$$
$$
$$
$$

Total Hours

##
##
##
##
##

Hours
##
##
##
##

Interpretation
The cost-benefit analysis will be used to compare the benefits of IT services for various
outsourced businesses against an increased in-house staff. Cost is an important factor, but not
the only factor, as the correct option will align with Company XYZs needs, values, and future
goals. The decision will be made by upper level management by reviewing the data in the costbenefit analysis.
Limitations
The usefulness of the cost-benefit analysis depends upon the credibility of the research
conducted on the outsourced businesses and industry standards for the estimated costs. The

26
outsourced businesses presented to Company XYZ will be chosen based on the information
found through the Internet and based upon recommendation of business partners. As not all
information on the Internet is accurate, any important data needs to be verified through
communication with the businesses of interest. Failure to do so may lead Company XYZ to
choose an ill fitted option. The costs presented to Company XYZ would only be valid for the
listed duration on the quote.
Summary
The end goal of conducting this cost-benefit analysis is to improve the way Company
XYZs IT needs are being met as it continues to grow, while keeping in mind its goals and
budget. The results of the analysis should be used to develop a short term and long term plan for
Company XYZs IT department. This plan will provide the basis for IT budget allocation and
future IT infrastructure planning.

27
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Appendix A: First Appendix
[If there is only one appendix in the paper, THEN the format should be - Appendix: Title
(no need for the A) otherwise the formatting is the same.]

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Appendix B: Second Appendix