A Configurational Approach to Information Technology Outsourcing

As scholarly interest in IT outsourcing has gained momentum recently, the ability to integrate this line of research into a coherent and consistent body of evidence seems to have been constrained by the difficulty of reconciling the contradictory findings that have emerged fromoutsourcing studies. This paper suggests that the recurring call for an integrative view of outsourcing can be addressed by breaking away from the reductionistic approach of contingency theory toward the holistic approach of configurational theory. The paper adopts a configurationalapproach to develop a framework of IT outsourcing effectiveness. Drawing on the relational view of the firm and taking a process view of outsourcing, the framework identifies four high-level dimensions that correspond to an organization\u27s resource position in four key areas:organizational IT value position, organizational IT asset position, relational asset position, and relational capability position. A novel structured method is used to identify the congruent (internally consistent) outsourcing configurations within the range of possible outsourcingconfigurations based on the interdependencies among the four dimensions. Furthermore, a settheoretic approach and Boolean algebra are applied to formally demonstrate the logic underlying the framework. Three congruent outsourcing configurations, labeled as asset dependence, relational dependence, and independence, emerge from this analysis. Drawing on the assumptions of configurational theory about organizational change and taking a dynamic perspective, theframework is extended to describe how organizations transition between outsourcing configurations over time. The discussion concluding this paper uses the framework todemonstrate how a configurational approach can effectively address the limitations of the outsourcing literature and advance outsourcing research. While configurational theory offers a holistic and multifaceted way of modeling the intricate interactions between IT and organizational attributes, previous IT studies have drawn on it to a limited extent, primarily as a lens to describe frequently recurring patterns of attributes. Hence, an important contribution of this paper is to demonstrate the potential value of comprehensively adopting a configurationalapproach for IT research in general and outsourcing research in particular

Make-or-buy configurational approaches in product-service ecosystems and performance

This research examines firm boundary configurations for manufacturers' product-service offerings. We argue that the building of a product-service ecosystem through collaboration with service providers in certain types of business services can increase performance as a result of the superior knowledge-based resources coming from specialized partners. By using fuzzy set qualitative analysis on a sample of 370 multinational manufacturing enterprises (MMNEs), the results reveal that effective servitization is heterogeneous across manufacturing industries and across business service offerings. The findings indicate that most industries achieve their highest performance through collaborations with value-added service providers in two out of three of the service continuum stages (Base and Intermediate services); while keeping the development of Advanced services in-house. The results help to contextualize the best practices for implementing service business models in MMNEs by detailing which service capabilities should be retained in-house and which should be outsourced to specialized partners in various industrial contexts.Peer ReviewedPreprin

Minimizing Complementors’ Risk in Third-Party Innovation: A Qualitative Comparative Analysis (QCA) of Digital Platform Configurations

The emergence of platforms is shifting the locus of digital innovation to ecosystems on which numerous developers create extensions with additional functionalities. Despite all the potential benefits for complementors, however, this new organizing logic of digital innovation also introduced essential new risks. Recent studies in IS focused on risk of IT projects from a contingency perspective neglecting the complexity of ecosystems. In order to shed light on this, our work examines how app architecture as a complementor´s control mechanism and four types of ecosystem hazards shape the likelihood and impact of the risk of failure in third-party innovation. By using a configurational approach based on fuzzy-set qualitative comparative analysis (FsQCA), we display complex interactional effects of the causal conditions on complementors’ perception of hazardous environments and thus provide valuable insights for both practice and theory on platform ecosystems

Measuring Outsourcing Relationship Quality: Towards a Social Network Analysis Approach

Outsourcing initiatives are complex undertakings requiring careful management of the client/vendor relationship. While monitoring the vendor’s performance is common practice, insight into the status of the ‘soft’ aspects of the relationship, such as trust, is often not available, although research highlights the social aspects as a critical success factor. However, monitoring the softer facets’ quality is difficult: Vendor managers track the status of the soft aspects, if at all, using survey tools among involved staff. This has shortcomings because it does not only capture subjective perceptions, but also interrupts the daily business of the participants. To develop a more objective instrument that collects data without interfering daily business, we draw on social network analysis. We suggest an approach that will eventually allow managers to monitor relationship quality in an efficient and objective way. The results suggest metrics to measure the soft factors of a relationship, such as trust and commitment

Outsourcing in the Age of Digital Transformation

Past and current attempts in digital transformation are enduringly changing business, requiring flexible strategic approaches and fast decisions. Companies seem to tend to rely on outsourcing for tackling this challenge. Consequently, companies need IT/IS outsourcing strategies fitting requirements. However, it remains unclear, how decisions on outsourcing contribute to strategic goals and supports successful digital transformation. Hence, in this study we aim at designing a model that enables companies to make their decisions in developing their outsourcing strategy considering digital transformation requirements. By adopting a design science approach, an artifact - the strategic outsourcing contribution (SOC) model - was developed and partially evaluated within one case company. The model provides a structured approach to the development of an outsourcing strategy by integrating transparent decision making. In addition, it provides mechanisms to assess the contribution of the model to strategic goals influenced by digital transformation initiatives and attempts

A robust fuzzy possibilistic AHP approach for partner selection in international strategic alliance

The international strategic alliance is an inevitable solution for making competitive advantage and reducing the risk in today’s business environment. Partner selection is an important part in success of partnerships, and meanwhile it is a complicated decision because of various dimensions of the problem and inherent conflicts of stockholders. The purpose of this paper is to provide a practical approach to the problem of partner selection in international strategic alliances, which fulfills the gap between theories of inter-organizational relationships and quantitative models. Thus, a novel Robust Fuzzy Possibilistic AHP approach is proposed for combining the benefits of two complementary theories of inter-organizational relationships named, (1) Resource-based view, and (2) Transaction-cost theory and considering Fit theory as the perquisite of alliance success. The Robust Fuzzy Possibilistic AHP approach is a noveldevelopment of Interval-AHP technique employing robust formulation; aimed at handling the ambiguity of the problem and let the use of intervals as pairwise judgments. The proposed approach was compared with existing approaches, and the results show that it provides the best quality solutions in terms of minimum error degree. Moreover, the framework implemented in a case study and its applicability were discussed

Identifying Different IS Outsourcing Client Types

Despite the experience with IS outsourcing for decades, numerous outsourcing arrangements fail in practice. Likely reasons for such failures can be ascribed to divergent expectations and an inappropriate governance of the outsourcing relationship. The objective of this paper is to explore different types of outsourcing relationships and their configuration depending on the underlying expectations of outsourcing clients. Based on survey responses from 268 outsourcing clients, the data was analyzed with an exploratory factor analysis revealing four main outsourcing motives. These factors were used as distinguishing variables in a subsequent cluster analysis revealing four distinct outsourcing client types: business-efficiency clients, cost-conscious clients, strategists, and IT-excellence and reliability-oriented clients. These types were characterized along their underlying outsourcing motives and attributes that form each type. The findings call for a more differentiated view on outsourcing relationships. The paper concludes with implications for outsourcing clients and vendors and an outlook on future research

An exploratory study of factors influencing make-or-buy of sales activities

Purpose This paper aims to explore how sales managers make resourcing decisions with particular focus on their perceptions of outsourcing. Design/methodology/approach This paper is based on in-depth interviews with 29 senior sales managers from a variety of industry sectors based in the UK. All had more than five years’ experience of making resourcing decisions. Findings The findings are that resourcing decisions are prompted by cost pressure, the need to access skills or to improve flexibility. Outsourcing preferences are strongly moderated by perceived reputational risk. Availability of suitable suppliers and the ability to manage outsourcing are also practical moderators. Research limitations/implications The sample was purposeful in identifying and accessing senior respondents in substantial companies with extensive experience, but it was not random. Practical implications Respondents reported a lack of information available when making resourcing decisions; the model proposed provides a framework by which sales managers can identify the factors which should be taken into account and the information they need to make objective evaluations of resourcing options. Originality/value It has been acknowledged in prior literature that there is relatively little outsourcing of sales activities. This is the first exploratory study of the perceptions of sales managers about resourcing options and the first conceptualisation of how sales resourcing decisions are made

Structuring the structure in outsourcing research A social network perspective on outsourcing relationship management

To what extent are structural assumptions veiled in extant outsourcing research? In this paper we suggest a unified view on social ties between individuals in outsourcing relationships. In a comprehensive literature analysis of outsourcing research since 2001, we identified structural assumptions and categorize them based on social network measures. Our analysis uncovers two salient patterns: 1) The gatekeeper vs. high density trade-off in interaction between client and vendor employees, and 2) the question whether the strength of ties between individuals can be too high for a professional outsourcing relationship. We present these patterns and other social network structures to formalize assumptions mostly not explicated yet considered important in existing outsourcing research. Based on our results, further research should analyze the impact of these patterns of social structure on outsourcing success