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Inhouse or Outsource

18.06.2015-Management-information-systems-in-education

The range of technology options available for Microfinance Institutions, Social Development Organizations and Funding Agencies working to achieve their social and economic goals can be divided into three main categories:

1) Generic technologies that have been developed and tested for a mass market and can be bought “off the shelf;”

2) Specialized technologies that have already been developed by someone else and could be modified to meet an institution’s needs;

 3) Technology solutions that do not yet exist and would have to be built, either in-house or by an external partner.

So what are the pros and cons of each option available?

Existing Options

The existing options available in the market are available for mass consumption as they have already been developed and tested, making them less risky and less expensive. But the universal availability makes them less likely to address your particular institutional needs. This does not mean that the market options do not have the capability to address your concerns at all. Even with all the differences between various Microfinance Institutions, there are many commonalities that can be addressed by the ready-made software and systems. But it would lead to employing different software and systems addressing various institutional needs. Not only will it mean increased spending on different software and systems but also add an extra burden on your staff to deal with different software and systems. This would mean increased trainings required for your staff. Furthermore, the issue of the integration of various software and systems would further complicate matters and put needless pressure on your operational matters.

Specialized Technologies

The popular method that a lot of Microfinance Institutions opt for is to take an existing technology such as CORE MICROFINACE BANKING and then mold it according their institutional needs. This helps them on two fronts; first they get something they know works and have acceptable quality and standards that meet the industry and regulatory requirements. Secondly, they have the capability to tweak the software according to their institutional needs. But it is important to partner with a right technology partner that can not only help you implement the software and system but also facilitate your transition from the old technology to the new by providing dedicated customer support and appropriate trainings for your staff that will help to acclimatize to the new technology.

New Technology Solutions

Designing new technology solutions that specifically address your needs either in-house or outsource them is usually a very costly affair. First of all your institution must have a clear understanding of what your needs are and more importantly the ability to clearly map out those needs so that the in-house team or your technology partner of choice can understand and formulate a viable and sustainable solution that falls in your budget. If you are developing the software and system in-house, your institution would first have to have a right team that can provide you what you are looking for? Secondly, it has the capability to provide maintenance and support for the solution implemented. When employing staff you will be facing the risk that the person behind the design and implementation of the software might move elsewhere; if he or she gets a better opportunity. Where will that leave you and how will you address such contingencies? But if you decide to design the solution from outside, how easily will you be able to access that technology? Historically, Microfinance Institutions have thought about this in-term of ownership but to truly understand the risks associated with this option you have to think in terms of access to technology. Furthermore, what kind of quality are you getting for the amount you are paying? Are you getting value for money? Plus, after implementation of the solution, the quality of customer support you will be getting from your chosen technology partner?

Microfinance institutions have many options at their disposal. They should only chose the one that best addresses their needs in their allocated budget and will provide them with an opportunity to mold the solution accordingly going forward as their institutional needs grow.

 

 

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