It backsourcing: from ‘make or buy ’ to ‘bringing it back in-house ’

Since the early 1990’s, IT outsourcing has become a popular strategy with contracts valued at billions of Euro, and durations ranging from five to ten years. Stories in the computing and business press together with reports of analyses by consultants highlight that during the life-time of some contracts, organisations have reconsidered their original decision to outsource. With this rethink, the options available are to continue with the existing vendor and the existing contract, to re-negotiate some or all of that contract with the existing vendor; to re-tender the contract or part of the contract and seek new vendors; or to backsource, bringing some or all of the previously outsourced activities back in-house. This last option has major implications for the organisation yet there is little empirical research on this final part of the outsourcing process. This paper introduces backsourcing as a legitimate strategy in the outsourcing process. An exploratory study identifies some recent examples where companies have made the decision to backsource, surfacing the rationale behind those decisions. From an analysis of the data, an end-to-end model for the outsourcing process is presented. The paper concludes with an agenda for future research

A case-based model for assessing the effectiveness of information systems outsourcing

Cataloged from PDF version of article.The objective of the research reported in this paper is to construct a model for assessing the effectiveness of Information Systems (IS) outsourcing. “Lack of in-house expertise” and “cost effectiveness” are widely accepted as major factors of motivation for IS outsourcing. In contrast with the decision models which are executed before an outsourcing engagement (a-priori), this effectiveness assessment model will be an a-posteriori guide which will enable clients to assess their outsourcing performance and re-evaluate their business and management strategies. Although various decision models and analytical frameworks have been proposed before, the literature is not abundant on a complete qualitative model. This paper examines the factors for outsourcing effectiveness through qualitative research conducted with multiple case studies for information systems developed for public organizations in the specific context of Turkey. A conceptual model consisting of various hypotheses is constructed and qualitatively evaluated

The Development of an Integrated Model of EMR Adoption: Incorporating the Organization Artifact

The information systems (IS) field has studied information technology (IT) adoption for several decades to, among other things, make it easier for organizations to derive value from IT by helping them to more effectively and efficiently use it. Extant IT adoption work has traditionally focused on a single type of structural form: the form in which the purchasing decision maker does not represent the end user of the innovation. While this structure may have adequately represented the predominant corporations historically, a greater number of organizations now contain employees who represent both the purchasing decision maker and the end user. We begin to investigate alternative structural forms by focusing on organizations in which the IT purchasing decision maker also represents the end user. Thus, we investigate the factors what physicians in a hospital setting versus those in private practice find important in adopting EMR systems. Our results demonstrate that the context of adoption matters, and we discuss the additional opportunities that exist in this area for researchers to examine this new theoretical lens for adoption research

The Concept of Governance in IT Outsourcing: A Literature Review

The significance of governance has been recognized in IT Outsourcing (ITO) research and practice. While the concept of governance is rooted from various reference disciplines, as a leading knowledge resource for outsourcing, the discipline of IS has contributed to the conceptualization of ITO governance with multiplex interpretations and from different aspects. To synthesize these contributions of IS scholars, we conducted a literature review within IS discipline, and identified two research strands: governance structure and governance mechanisms. With our findings, we describe how "structuring" the governance means defining the combination of an appropriate portfolio of governance structures, together with different coordination mechanisms at different stages of the ITO lifecycle. Furthermore, we discuss how the ITO research community can be informed by reference disciplines on the conceptualization of governance. On this basis, we suggest the existing gaps and future directions of research on ITO governance

The Role of Dynamic Capabilities in Outsourcing Sales and Marketing Functions: A Resource-Advantage Perspective in the Context of Consumer Packaged Goods

Outsourcing refers to contracting out the functions to a third party instead of conducting them in-house. The main contribution of this dissertation is to develop and test a model of successful outsourcing in the accomplishment of headquarters selling task. Specifically, it intends to (a) provide a theoretical framework for outsourcing partnership performance, (b) explore the potential complementarities construct in the context of a dyadic outsourcing relationship, (c) examine the role of learning dynamic capabilities in turning potential complementarities into outsourcing success, and (d) explicate the role of structural social capital as an antecedent to learning dynamic capability construct . The conceptual framework of the model is based on the resource-advantage theory which posits that resources, potential complementarities and dynamic capabilities are explicated as sub-constructs. The pool of respondents who are the practicing managers of outsourcing in the consumer packaged goods industry was used to test the hypothesized relationships. The findings showed that the learning dynamic capabilities construct is the most important factor affecting in the outsourcing partnership performance in the context of headquarters selling task. The task-related resources of the outsourcer had a significant positive effect on potential complementarities. However, the positive effect of the outsourcee’s task-related resources on potential complementarities was not significant. Likewise, the positive effect of the potential complementarities on the outsourcing partnership performance did not emerge as significant. The effect of structural social capital of the outsourcer had a significant but negative influence on learning dynamic capabilities. The positive effect of structural social capital of the outsourcee on learning dynamic capabilities and the moderating role of learning dynamic capabilities were found to be insignificant

Developing a case for a more granular examination in the selection of information technology job roles most suitable for outsourcing and offshore placement

This study reviewed shortcomings present in the process of selecting the scope of offshore outsourcing vendor usage. While extensive financial cost information is available to companies considering this alternative, there is little mentioned of the quality of service performance experienced by the internal work teams that act as the primary consumers of these contracted services. Additionally, it is common practice to contract offshore outsourcing on a project or departmental level without granular examination of suitability at the job role level. This study surveyed a representative sample (n = 30) of IT professionals, and addressed two related research questions regarding internal value return. The first questioned whether a satisfactory level of overall job performance is returned by holistically-outsourced IT services to offshore vendors and results were inconclusive. The second examined if differences were present between work teams responsible for various IT functions, indicating a need for more granular consideration and found significant differences between work teams\u27 needs. As to the first research question, results were calculated from the aggregate mean of each departmental review with which the respondent had direct experience. Overall job performance satisfaction was measured using the t-test methodology as minimally sub-par, with insufficient significance to reject the possibility of sampling error, t (22) = 2.57, p \u3e .05. As to the second research question, departmental satisfaction ratings in 10 factors relevant to service delivery were analyzed for variation in order to determine if significant valuation differences were present. Significant variation present in satisfaction levels between teams are representative of variation in factor importance by department. Three discrete departments -- Application Development, Server Operations, & Solutions and Architecture were examined. An analysis of variance showed that the effect of performance factor was significant F (9, 27) = 304.434, p \u3c 1 that the effect of work team was significant at F (3, 27) = 43.190, p \u3c 1. As both performance factor and work team variations were significant above the confidence level (95%) chosen as the threshold, the null hypothesis that there was no variation in factor delivery efficacy was rejected. The results of the second research question of whether a more detailed and granular examination would reveal differences in factor importance -- or the difference in emphasis on one factor over another, a statistically significant finding that such differences are present was found. Significant differences in value perception present between individual work teams and the collective totals indicated that each work team was unique in their expectations -- and valuation -- of services provided.In order, therefore, to provide optimal value, a more granular examination of each position or team to be outsourced should be conducted in order to reserve those positions that do not perform well for in-house performance, and only outsource those positions likely to do well to an offshore vendor. As each company requires its own unique mix of IT management needs appropriate their situation, each IT work team was found to have a level of unique need as well. These needs define work team satisfaction levels with services provided. Additionally, companies that avoid single factor decision-making with regard to offshore outsourced vendor use may see more optimal results. For the same reasons outlined above, the service delivery performance seen by internal work teams reflect the quality of work performed by the vendor. If such value degrades below satisfactory levels, it is possible to erode the savings realized by cost incentives to a negative return

Theory Informing Decision-Making on Outsourcing: A Review of Four ‘Five- Year’ Snapshots Spanning 47 Years

This study investigates how researchers use theory for decision-making on outsourcing through a longitudinal systematic literature review covering four five-year intervals spanning 1965–2011. Each of the 249 retrieved papers has been categorised based on theory used, nature of literature review, research method, type of industry investigated, organisational functions, performance criteria and level of decision making. Notwithstanding a surge in academic writings on outsourcing, our analysis of the four periods shows that few papers contribute to theory or provide further insight into outsourcing. The focus of most papers tends to be on the practitioner’s perspective with decision making shifting from mainly financial–economic and operational considerations to strategic, long-term and multidimensional criteria that are not necessarily linked to a particular theoretical stance. The findings also imply that a full account of theories, their application as well as systematic testing in the context of outsourcing decision making, is still needed for advancing such knowledge. However, the evidence also suggests that methods for decision making do not vary much between domains and functions, although there are some exceptions, such as R&D, logistics and public sector functions. This study also identifies a framework for future research into decision-making on outsourcing

Deviations of Governance In IT Multi-Sourcing: A Case Study

IT outsourcing (ITO) refers to the shift of IT/IS activities from internal to external of an organization. In prior research, the governance of ITO is recognized with persistent strategic importance for practice, because it is tightly related to ITO success. Under the rapid transformation of global market, the evolving practice of ITO requires updated knowledge on effective governance. However, research on ITO governance is still under developed due to the lack of integrated theoretical frameworks and the variety of empirical settings besides dyadic client-vendor relationships. Especially, as multi-sourcing has become an increasingly common practice in ITO, its new governance challenges must be attended by both ITO researchers and practitioners. To address this research gap, this study aims to understand multi-sourcing governance with an integrated theoretical framework incorporating both governance structure and governance mechanisms. The focus is on the emerging deviations among formal, perceived and practiced governance. With an interpretive perspective, a single case study is conducted with mixed methods of Social Network Analysis (SNA) and qualitative inquiries. The empirical setting embraces one client firm and its two IT suppliers for IT infrastructure services. The empirical material is analyzed at three levels: within one supplier firm, between the client and one supplier, and among all three firms. Empirical evidences, at all levels, illustrate various deviations in governance mechanisms, with which emerging governance structures are shaped. This dissertation contributes to the understanding of ITO governance in three domains: the governance of ITO in general, the governance of multi-sourcing in particular, and research methodology. For ITO governance in general, this study has identified two research strands of governance structure and governance mechanisms, and integrated both concepts under a unified framework. The composition of four research papers contributes to multi-sourcing research by illustrating the benefits of zooming in and out across the multilateral relationships with different aspects and scopes. Methodologically, the viability and benefit of mixed-method is illustrated and confirmed for both researchers and practitioners.IT-palveluiden ulkoistamisen tarkoituksena on hankkia organisaation tarvitsemat IT-palvelut toiselta organisaatiolta. Hankittavien palveluiden laatu on aiemman tutkimuksen mukaan riippunut siitä, miten palveluiden ulkoistusta on hallittu. Aihepiiristä ei kuitenkaan ole olemassa integroitua tieteellistä viitekehystä. Lisäksi aiempi IT-palveluiden hallintaa käsittelevä empiirinen tutkimus on perehtynyt vain kahdenvälisiin asiakas–tuottaja suhteisiin. Tämän johdosta on tärkeää tutkia lisää IT-palveluiden ulkoistamisen hallintaa yleensä ja erityisesti niissä tilanteissa, joissa IT-palvelut on ulkoistettu useille toimijoille eli kyse on IT-palveluiden moniulkoistamisesta. Tässä tutkimuksessa kehitettiin IT-palveluiden moniulkoistamisen hallintaan soveltuva integroitu, tieteellinen viitekehys, joka sisältää sekä hallinnan rakenteet että hallinnan mekanismit. Työn empiirisessä osassa erityisenä kiinnostuksen kohteena oli se, mitä palvelun hallinnasta oli virallisesti sovittu, kuinka eri osapuolet olettivat hallinnan tapahtuvan, ja miten hallinta käytännössä toteutui. Aihetta tutkittiin tulkitsevan tapaustutkimuksen keinoin yhdistäen puolistrukturoitua haastattelututkimusta ja sosiaalisten verkostojen analyysiä. Tutkimusaineisto kerättiin yhdestä asiakasyrityksestä ja sen kahdesta IT-palveluiden toimittajasta. Aineiston analysointi tehtiin kolmella tasolla: yksittäisen toimittajayrityksen, asiakkaan ja toimittajan välisen suhteen sekä kaikkien toimijoiden välisten suhteiden tasolla. Tutkimuksessa osoitetaan, että aiempi IT-palveluiden ulkoistamisen hallintaa käsittelevä tutkimus on jakautunut kahteen tutkimusalueeseen, joista toinen keskittyy hallinnan mekanismeihin ja toinen hallinnan rakenteisiin. Tutkimuksessa kehitetty IT-palveluiden ulkoistamisen hallinnan uusi viitekehys hyödyntää sekä hallinnan mekanismeihin että hallinnan rakenteisiin liittyviä käsitteitä. Tutkielma osoittaa, että moniulkoistamiseen liittyviä toimijoita kannattaa analysoida sekä itsenäisinä toimijoina että verkoston jäseninä. Tutkimus nostaa myös esille hyötyjä laadullisten ja määrällisten tutkimusmenetelmien yhdistämisestä sekä tieteellisen tutkimuksen tekemisessä että yritysten käytännön kehitystyössä.Siirretty Doriast

An investigation of the partnering strategies in application service provision: A vendor perspective

This thesis was submitted for the degree of Doctor of Philosophy and awarded by Brunel University.This research aims to investigate the partnering strategies in Application Service Provision (ASP) from a vendor's perspective. Although some attention was recently given to the ASP model, the main focus of the published academic work was essentially on the customer's side. This research focuses on ASP vendors, and aims at studying the partnering strategies used by these in order to source the different ASP model components. From the studied literature, it was found that the ASP model relies on 4 main infrastructural layers for delivering services: the data storage layer, the server layer, the network layer, and the application layer. Due to the different nature of each of these layers in terms of the required technology, it was concluded that ASP is a complex service, for which the required resources and capabilities are unlikely to be owned by one single company, thus the importance of studying the partnering strategies needed for ASP vendors. Through the use of Transaction Cost Economics (TCE) and the Resource-based View (RBV), predictions were made about the expected sourcing modes (market, integration, or strategic alliance) for each of the ASP layers. The next phase was to study six ASP cases, in which the partnering strategies of each firm for each ASP layer were studied. The main result from this analysis was that the actual outcomes from the case studies did not fully match the predictions that were initially made. A cross-case analysis was then undertaken by reapplying TCE and RBV to the studied cases. In this phase, for each ASP layer in each case study TCE and RBV attributes were investigated, and the drawn conclusions were two fold. First, the initial assumption that the software layer is the core layer of the model, based on which the predictions were made, was rather flawed; it was found that although many ASP vendors draw value from the application layer, several others rely on other ASP layers. Secondly, it was concluded that the two used theories - TCE and R-BV - did not, independently, explain all the actual sourcing modes of the studied ASP vendors, though RBV showed more explanatory power than TCE. Furthermore, it was demonstrated that the combination of TCE and RBV, in the context of this study, offers more explanatory power than if the two theories were used independently. Although this is an important finding in the context of ASP, the implications on IS research is tremendous, where multiple-theory applications are increasingly called for