Development and validation of a conceptual framework for IT offshoring engagement success

“A thesis submitted to the University of Bedfordshire, in partial fulfilment of the requirements for the degree of Doctor of Philosophy”.The study presented in this thesis investigates Offshore Information Technology Outsourcing (IT offshoring) relationships from clients’ perspective. With more client companies outsourcing their IT operations offshore, issues associated with the establishment and management of IT offshoring relationships have become very important. With the growing volume of offshore outsourcing, the numbers of failures are also increasing. Therefore, both clients (service receivers) and suppliers (service providers) face increasing pressure to meet with the objectives of IT offshoring initiatives. Improving the quality of the relationship between client and supplier has frequently been suggested in the literature as probable solution area, however not much literature and empirical evidence is available in this respect. The aim of the study is to make a theoretical and practical contribution by studying the interplay between the critical factors influencing the relationship intensity level of the exchange partners and suggest measures that can potentially increase the success rate in IT offshoring engagements. The objectives of this study are: 1. To identify the relevant critical factors and explore its causes and effects (antecedents and consequences) on the relationship intensity significance level. 2. To develop an integrated conceptual framework combining the hypothetical relationship among these identified critical factors. 3. To empirically validate the conceptual framework. To accomplish the first objective and building the theoretical platform for the second objective, three research questions are identified and answered through empirical study backed by literature evidence. The second objective is addressed through an integrative conceptual framework by analysing the related studies across other disciplines, gaps in the existing theories and models in the outsourcing literature. Coupled with literature gap analysis, the researcher adopted some of the relevant features from across various disciplines of management and social sciences that are relevant to this study. After that, the third objective, the research hypotheses are validated with empirical examination conducted in Europe. Seven research hypotheses are developed based on literature analysis on the relationship of the key constructs in the conceptual framework. This study is explanatory and deductive in nature. It is underpinned mainly by a quantitative research design with structured questionnaire surveys conducted with stratified sampling of 136 client organisations in Europe. Individual client firm is the unit of analysis for this study. Data analysis was conducted using partial least squares (PLS) structural equation modelling techniques. In this research, empirical support was found for most of the research hypotheses and conclusions of the study is derived. An investigation into trust as a concept is used to denote relationship intensity, as the central construct of the framework. The validated conceptual framework and tested hypothesis results are the main contributions of this study. The results of this study will also be useful in terms of adopting the conceptual framework linked with hypotheses as a point of reference to begin with, in order to accomplish a healthy exchange relationship. However, a further deep dive and fine tuning the sub-units/composition characteristics of each critical factor may be needed for individual outsourcing initiative(s). This study is particularly relevant to the client-supplier firms already engaged in a relationship but can also be useful to those clients who are planning to begin their journey in IT offshoring in the near future, as a preparatory platform

Effective Strategies for Managing the Outsourcing of Information Technology

More than half of information technology (IT) outsourced projects fail, primarily due to a lack of effective management practices surrounding the outsourcing end-to-end process. Ineffective management of the IT outsourcing (ITO) process affects organizations in the form of higher than expected project costs, including greater vendor switching or reintegration costs, poor quality, and loss of profits. These effects indicate that some business leaders lack the strategies to effectively manage the ITO process. The purpose of this single-case study was to apply the transaction cost economics (TCE) theory to explore strategies 5 business professionals use to manage an ITO project in a financial services organization located in the Midwestern region of the United States. Participant selection was purposeful and was based on the integral role the participants play on the ITO project. Data collection occurred via face-to-face semistructured interviews with the participants and the review of company documents. Data were analyzed using inductive coding of phrases, word frequency searches, and theme interpretation. Three themes emerged: vendor governance and oversight, collaborative strategic partnership, and risk management strategies enabled effective management of ITO. Identifying and executing appropriate outsourcing strategies may contribute to social change by improving outsourcing infrastructure, which might support job creation; increasing standards of living, especially within emerging markets; and heightening awareness of different cultures, norms, and languages among people living in different regions around the world to establish commonalities and gain alignment with business practices

IT Project Management from a Systems Thinking Perspective: A Position Paper

We proposes a Systems Thinking approach to the study of IT project management and show how this approach helps project managers in controlling their projects. To illustrate our proposal, we present an example model of the dynamics of IT out-sourcing projects. The example model explains these dynamics in terms of feedback loops consisting of causal relations re-ported in the literature. The model provides insight in how coordination, trust, information exchange and possibilities for op-portunistic behaviour influence each other and together influence delivery quality, which in turn influences trust. The integra-tion of these insights provided by applying the Systems Thinking perspective helps project managers to reason about how their choices influence project outcome. The Systems Thinking perspective can serve as an additional tool in the academic study of IT project management. Applying the Systems Thinking perspective also calls for additional research in which this perspective is itself the object of study

Examining political risk in service offshoring strategies

This research investigates political risk in the context of service offshoring and the corresponding impact on risk management decisions. The first stage of the study uses the Repertory Grid Technique (RGT), to explore key post-contract political risks experiences within offshore outsourcing activities. Twelve key political risks affecting offshore outsourcing decisions are identified, and the moderating effect of offshoring activity types (BPO, ITO or KPO) on political risk exposure and impact perceptions is highlighted. The research also explores the conditioning effect of industry specific exposure to political risk and enhances the explanatory ability of the Transaction Cost Economics (TCE) constructs, offering a re-operationalization of the political risk component of external uncertainty. The second stage of the research introduces a series of hypotheses between offshoring flows and political risk profiles, and applies multiple regression to analyse political risk affecting offshore activities in low cost countries across contract-based offshoring engagements and FDI. The findings highlight that political risk is a genuine business concern for offshore contract-based outsourcing modalities, and identify concerns with Intellectual Property protection, Quality of Bureaucracy and Corruption as key considerations affecting location decisions in low-cost countries. The research further suggests a positive relationship between strong country level institutional and regulatory systems and high knowledge content in offshoring engagements. From a practical perspective, the research highlights the need for managerial tools to determine diversified firm and industry specific political risk impact on global service outsourcing engagements. The key practical contribution is the development of differentiated political risk typologies that can capture the nuances of external risks in offshoring, allowing for more accurate risk assessment of offshoring decisions

Lost, Dysfunctional or Evolving? A View of Business Schools from Silicon Valley

Recent articles have rekindled discussions around the direction and relevance of US business schools. The two main viewpoints are distinct but equally critical. On one hand, business schools are considered overly focused on “scientific research” and having lost their connection to “real world” and management issues. On the other hand, schools are considered “dysfunctionally” focused on media rankings and short-term superficial marketing fixes. Our study of educational opportunities and workforce development in Silicon Valley suggests a different viewpoint. We agree that both approaches correctly identify the challenge of preparing managers in globalized world. However, we believe they misdiagnose the cause of the failure. Rather than being lost or dysfunctional, we believe business programs — like the firms and students they serve — are in the process of evolving to meet a shifting global and local environment. Our findings indicate that business schools face structural, content, and program shifts. Educationally, business programs continue to be seen as doing a good job of educating their students in core functional areas and processes. However, they do less well in teaching their graduates interpersonal skills, real-time decision-making, recognition of contexts, and integration across functional areas. These are increasingly the skills demanded by the global business environment. Even more challenging is meeting the demand for both sets of skills within very specialized fields like technology management. Structurally, new types of students and learning demands are placing stresses on traditional full-time two-year programs and their business models. Women and minority groups increasingly form the majority of the future student population, with distinct needs and demands for part-time and executive education. This shift is also evident in demands for life-long learning and engagement as opposed to a fixed, one-shot program experiences. These challenges require business schools to build upon what they do well, while innovating to serve new business and student needs.management education; Silicon Valley; globalization; technology

What is Offshoring Management Capability and How Do Organizations Develop It? A Study of Dutch IT Service Providers

This study develops a capability perspective of offshoring. While previous research shows that experience affects future offshoring decisions, we still lack an understanding of what offshoring management capability is and how organizations develop it. Using data on five Dutch IT service providers, we find that offshoring management capability is multidimensional as it comprises four dimensions: coordination competency, relationship development, relationship design, and organizational identification. Furthermore, we uncover the process through which organizations can actively develop an offshoring management capability. We find that there are four elements in this learning loop: an offshoring growth mentality, adaptive monitoring of offshoring performance, offshoring reflexivity, and mechanisms for storing and disseminating offshoring best practice. Therefore, our capability perspective of offshoring provides a comprehensive conceptualization of offshoring management capability as a multidimensional construct and uncovers the process through which organizations develop it

Applying Costing Models for Competitive Advantage

Making good supply management decisions is essential to competing in the global market, as these decisions often account for more than 60% of the average company\u27s total costs. The purpose for this single case study was to explore the strategy that a large manufacturing firm in northeast Ohio used to identify costs when making effective purchasing decisions. The total cost of ownership (TCO) theory was the conceptual framework for the study. The data collection included a semistructured interview with a senior level supply manager and a focus group consisting of mid-level supply managers. Member checking provided verification of the interpreted participants\u27 responses. Methodological triangulation included 2 company documents pertinent to the supply management department that resulted in 4 emerging themes: identifying total costs, tools for implementing TCO, supplier rating and management, and detailed recordkeeping. The findings of this study revealed a simpler approach to capturing and organizing data than was acknowledged in the literature reviewed. The findings showed TCO supported purchasing decisions that often resulted in domestically or regionally purchased products rather than offshore buys. Therefore, reassessment of true total costs by senior manufacturing supply managers might impact social change as more procurement decisions forego sourcing offshore and bring manufacturing of products back to local communities

Extension of internationalisation models: drivers and processes for the globalisation of product development – a comparison of Danish and Chinese engineering firms

This paper develops an extension to established production- and supply chain management focused internationalisation models. It applies explorative case studies in Danish and Chinese engineering firms to discover how the globalisation process of product development differs from Danish and Chinese perspectives. The paper uses internationalisation and global product development theory to explain similarities and differences in the approaches. Grounded in case study results, a new model for internationalisation is proposed. The new model expands the internationalisation process model to include steps of product development and collaborative distributed development beyond sourcing, sales and production elements. The paper then provides propositions for how to further develop the suggested model, and how western companies can learn from the Chinese approaches, and globalise their product development activities from the front end of the value chain rather than from the back-end

TRENDS IN IT HUMAN RESOURSES AND END-USERS INVOLVED IN IT APPLICATIONS

The Bureau of Labor Statistics projected the demand for information technology (IT) human resources to increase by 13.26 percent between 2014 and 2024. In this survey research, the IT professionals estimated a growth of 34.16 percent in IT human resources over a period of five years from the year 2016. The goal of this survey study was to try to understand the discrepancy in the estimates for IT human Resources requirements by developing a theory-driven model to evaluate the impact of growth in IT outsourcing/offshoring, cloud-computing, end-users-computing, IT applications, and usage of commercial-off-the-shelf/ERP on the need for IT human resources

Information Systems Offshoring—A Literature Review and Analysis

IS offshoring has become one of the most discussed phenomena in IS research and practice. Particularly due to its rapid evolvement, current research on IS offshoring lacks a consolidated view on existing results. The article at hand seeks to meet this need by systematically reviewing and analyzing prior academic literature on IS offshoring. Based on a review of top-ranked IS and management journals as well as IS conference proceedings, we compile an exhaustive bibliography of ninety-six publications solely focusing on IS offshoring from a (project) management perspective. To adequately address the immense diversity of these publications, a multi-perspective research framework consisting of three perspectives, namely, research focus, research approach, and reference theory, is introduced and forms the basis for our literature analysis. The analysis results confirm the appropriateness of our framework and reveal directions for future research along the framework perspectives: Most importantly, in an effort to increase the significance and the trustworthiness of their results, researchers should apply a more theory-driven approach and provide a better description of their research context. Moreover, future research needs to pay particular attention to the pre-implementation stages of an IS offshoring initiative as well as the special nature of nearshoring and captive offshoring. Across all project stages, researchers should not only concentrate on the client point of view but incorporate multiple points of view