Contextualisation of the complexity in the selection of developing country outsourcees by developed country outsourcers

© 2018 Informa UK Limited, trading as Taylor & Francis Group. Outsourcing research has recognised that selecting the right offshore supplier (outsourcee) in low-cost distant developing countries is complex, but central to outsourcing success. More specifically, the combination of outsourcee contextual internal factors (e.g. capabilities) with outsourced-to country contextual external factors (e.g. political, legal, economic, socio-cultural) as two fundamental and interconnected decisions firms make when outsourcing remains an underexplored research gap. Therefore, through a rigorous three-tier qualitative approach we, firstly, develop a contextual Environmental Separation Index (ESI) decision tool to help outsourcing firms in making more informed decisions when selecting outsourcees and outsourcing locations. Secondly, we operationalise the ESI as intuitive and easy to use decision tool, yet with a provision to deliver a truly context proof outsourcee selection decision. Thirdly, we adopt a complexity theory lens to explain that narrowing the contextual outsourcer–outsourcee gap facilitates a mind-set shift in outsourcing relationships from hierarchies to networks and from controlling to empowering developing country outsourcees. We show from a complexity theory perspective how contextual separation gaps between developed country outsourcers and developing country outsourcees can be an effective way to grasp the evolutionary path of outsourcing relationships

Moving Up The Value Chain: Exploring The Issues For Chinese Software & Services Outsourcers

To move up the value chain, Chinese software and services outsourcing (SSO) providers will need to provide more value-added services by improving their organisational capabilities and innovative capacity. This paper reports on early findings on processes in which Chinese SSOs engage in order to move up the value chain, towards a transformative collaborative relationship with clients which is referred to as “collaborative innovation”. We provide a literature review on the concept of collaborative innovation and examine different aspects of organisational learning that occur in the interaction between vendors and clients. Data obtained from semi-structured interviews with 12 Chinese SSO providers supplies the basis for the findings which suggest that there are spaces of interaction between clients and providers which offer opportunities for better collaborative practices to emerge and consequently more innovative capacity

Offshoring effectiveness: Measurement and improvement with optimization approach.

This study takes a refreshing look at IT outsourcing from a vendor\u27s perspective and discusses best practices required to effectively manage offshore business needs and offshoring effectiveness. We have conducted a detailed investigation to learn why outsourcing ventures fail, how to effectively measure up to service provider capability, and how to deliver strategic value to the end customer. Extant literature does not talk about the vendor\u27s issues and problems in outsourcing, and our investigation emphasized the vendor\u27s perspective on offshoring strategy and offshore resource effectiveness as the two important differentiators in a make-or-buy decision. Measurement metrics for each of the two items were devised to estimate their effect on offshoring effectiveness. We spoke to some of the top 10 IT vendors in India, collected offshoring data from both clients and vendors, and used the data to validate our decision framework. The framework helps us to investigate current industry practices in IT outsourcing, identify issues and problems beyond the obvious advantages of outsourcing, and propose measures to assess offshoring effectiveness. The investigation gave us an opportunity to record the best IT practices as well as suggest possible improvements in the service or product delivery cycle to enhance customer experience

What are the Most Important Classes of Information Systems for eSourcing Service Providers? Experiences from Three Case Studies in the Chinese eSourcing Market

Information and Communications Technology (ICT)-enabled international sourcing of software-intensive systems and services (eSourcing) is increasingly used as a means of adding value, reducing costs, sharing risks, and achieving strategic aims. To maximally reap the benefits from eSourcing and mitigate the risks, providers and clients have to be aware of and build capabilities for the entire eSourcing life-cycle. China is in a remarkable position to become a superpower for eSourcing service provisioning within the next 10 years. Yet, the extant literature does not offer a comprehensive enough guidance for eSourcing management in the Chinese context. This research project will probe the eSourcing life-cycle in Information and Communications Technology Outsourcing (ICTO), Business Process Outsourcing (BPO), and Knowledge Process Outsourcing (KPO) contexts. It will provide as generalizable scientific knowledge as possible concerning the most important business practices and classes of information systems for eSourcing service providers from the viewpoint of service provisioning, breakdown recovery, and the redesign of the eSourcing life-cycle

(The) Globalization strategy of Korean it outsourcing companies via foreign direct investment

Thesis(Master) --KDI School:Master of Foreign Direct Investment,2006masterpublishedby Tae Kyoung Kim

Governance Methods Used in Externalizing Information Technology

Information technology (IT) is the largest capital expenditure in many firms and is an integral part of many organizations\u27 strategies. However, the benefits that each company receives from its IT investments vary. One study by Weill (2004) found that the top performer in the sample was estimated to have as high as a 40 greater return on its IT investment than its competitors. To expedite the progress toward getting better value from IT investments, along with the need to deal with the increasing complexity and expense of IT, a growing number of companies are turning to outside service providers to develop and/or manage various aspects of their information systems. The governance methods used by firms to maintain control over the quality, services, and cost of IT outsourcing are the focus of this dissertation.Previously in the literature, researchers have looked into the phenomenon of outsourcing from various perspectives. However, existing literature has not constructed or proposed an outsourcing model that examines the important moderating impact of internal technical capabilities to governance mechanisms. Building on existing literature related to IT outsourcing, this dissertation examines governance mechanisms that were used by firms to maintain control over the quality, services, and the cost of outsourcing of IT in order to identify their contribution to the success of IT outsourcing initiatives from the perspective of managers whose companies have engaged in IT outsourcing. In this dissertation, a research model was developed, and through an on-line survey instrument, data were collected from the members of the Information Systems Community of Practice in the Project Management Institute. The findings showed that the following governance mechanisms had positive impact on managerial perceptions of IT outsourcing success: (1) Financial commitment in the form of dedicated asset-specific investments and (2) attitudinal commitment. This study also confirms the moderation effect that firm technological capab

Determinants of Outsourcing: Transaction Cost Economics and Core Competencies Theory

A significant feature of firm behaviors in the 1990s has been the practice of outsourcing. From the view of outsourcing clients, the outsourcing decisions are always influenced by several factors, such as cost reduction, focus on core competency, strategic requirement and so on. This paper based on the theory of transaction cost and core competencies, through the introduction of decision model to illustrate three critical determinants for outsourcing decision. This paper applies qualitative analysis to explain three dimensions of the model: Assets specificity, Sunk costs and Core competencies. The case study of China Development Bank shows how firm makes the outsourcing decision according to three aspects in the model and its outcomes of outsourcing. Finally, summarize our results and try to give suggestions to government, outsourcing suppliers and clients

Exploring outsourcing as a source of competitive advantage

This research explores how a firm in the electronics industry may achieve competitive advantage through the relationship created with a manufacturing partner when outsourcing manufacturing operations. Semi-structured interviews were carried out with senior decision makers with responsibility for outsourcing in a cross section of companies in the European electronics industry, and with senior executives in contract manufacturing companies based in South-East Asia, to investigate the decision making process and the amount of strategic choice available, and then to investigate what benefits were perceived to have been achieved by the outsourcing firm. The research questions what extent do decision makers consider competitive advantage when deciding to outsource, what competitive advantages, or partnership value, can be created by and can be attributed to the outsourcing partnership and to what degree competitive advantage has been achieved through outsourcing and how sustainable is it likely to be. The research found that the decision to outsource was normally made in order to save costs and/or to enable a firm to focus on core competencies. It was also found that expected cost savings were often not achieved and that some key capabilities were irretrievably lost. What some firms did find, however, was that they achieved some level of competitive advantage from working with their manufacturing partner that they did not expect when they made the decision to outsource, these advantages evolved over time and are grouped into three areas, classified as ‘values’: - Sourcing value - Technology value - Market value Collectively the researcher has termed these as ‘Partnership Value’. Partnership value is the competitive advantage a firm achieves in the marketplace through outsourcing manufacturing and working with its manufacturing partner. The research concludes with a framework that can assist decision makers considering to outsource manufacturing so that they may achieve greater value from the relationship with their chosen manufacturing partner by evaluating factors related to the external and competitive environment and achieving Partnership Value

Global and regional sourcing of ICT-enabled business services: upgrading of China, Hong Kong and Singapore along the global value chain

Offshoring, as part of globalisation, first started decades ago with manufacturing processes disintegrated along the global value chain and dramatically redistributed to low-cost regions. The next global shift of work involving ICT-enabled business services has arisen since the 1990s, especially featuring the success of India’s supplier role. The possibilities for the Global South to move up the value ladder are well demonstrated by the achievements of the newly industrialised economies in East Asia in the first shift and of India in the second. In the services sector, however, potential for upgrading is conditioned by quality-based elements, such as trust, culture and language, which vary both between producing and market areas. Flows are increasingly multi-directional, requiring attention to the neglected issue of demands from fast-growing Southern economies. So how do locations and firms in the Global South attempt to upgrade in the regime of rising services offshoring? The Indian experience especially in serving Anglophone markets in the Global North has been widely documented – but not that of East Asian economies, with their distinct characteristics and strong historic, ethnic and cultural ties with each other. This study examines the upgrading possibilities and constraints of China, Hong Kong and Singapore along the global services chain. For cross-case analysis, it focuses on three specific sets of services, including information technology, finance and accounting, and customer contact services. The concepts of global value chain, competitive advantage and capabilities are applied to reconstruct the phenomenon of services offshoring from both the demand and supply perspectives in the selected locations, and synthesise the dynamics between locational characteristics and firm strategies. A series of distinct upgrading strategies are identified, involving mixes of manufacturisation, knowledge-intensification and deepening relational capabilities to exploit both regional advantages of language/cultural proximity and established global links